Finance Minister is accountable to Parliament with Fiscal Responsibility Act

KUALA LUMPUR: With the recently passed Fiscal Responsibility Act, the Finance Minister is now accountable to Parliament for hitting fiscal targets, says Datuk Seri Anwar Ibrahim.

“The Fiscal Responsibility Act (FRA) is important as it gives the Finance Ministers powers to Parliament,” he said

On whether the fiscal deficit target is achievable, Anwar said it is within reach.

“Several measures have been taken, including prudent spending,” he said during the ministerial reply on the Budget 2024 in the Dewan Rakyat on Thursday (Nov 2).

“Implementing targeted subsidies, the capital gains tax and the high-value goods tax will increase the government’s revenue by RM4bil. Hence, I believe the fiscal targets can be achieved”.

“If the fiscal deficit targets are not achieved, I have no choice but to table an (adjustment plan) in Parliament. (Parliament) can support, reject or criticise by members of Parliament,” he added.

He said this means that the government cannot set targets arbitrarily as it is answerable to Parliament.

He said the Procurement Act will also be tabled next year.

He also said that the notion that narrowing fiscal deficits would mean that there will be less funds for development and spending on the well-being of the people is false.

One of the objectives of the Fiscal Responsibility Act passed on Oct 11 was to reduce the fiscal deficit to 3.2% by 2025.

The government aims to reduce the fiscal deficit to 5% in 2023 and 4.3% in 2024.

“This reduction was not done drastically as the government has maintained an expansionary fiscal policy with its allocation for expenditure

He said there was no reduction in development expenditure (DE), adding that the RM97bil allocation in 2023 included RM13bil to pay off 1MDB bonds. For 2024, however, RM90bil was allocated for DE.

“The fact remains that there was no reduction in DE for 2024. The government is committed to allocating at least RM90bil for DE in 2025,” he said.

The second reading of the Budget 2024 was passed in the Dewan Rakyat on Thursday(Nov 2).

The government’s spending plan was passed with a voice vote.