The effect of a hung parliament

KUALA LUMPUR: The just-concluded 15th General Election (GE15) has brought Malaysia to unchartered waters with a hung parliament, wherein neither coalition crossed the indispensable line of 112 simple majority to form the next government independently.

The conundrum is not surprising, Universiti Tun Abdul Razak economist Prof Dr Barjoyai Bardai said, adding that it is how democracy works today.

“The new government can be formed without a majority of winning seats, a mixed government of several political parties, and a new coalition emerges,” he told Bernama in an interview.

A total of 220 of the 222 parliamentary seats were contested as polling in the Padang Serai parliamentary constituency in Kedah has been postponed to Dec 7 following the death of the Pakatan Harapan (PH-PKR) candidate for Padang Serai, incumbent M.Karupaiya on Wednesday.

The new date for nomination of candidates is Nov 24.

At the same time, voting was suspended at 11 polling stations in Sarawak’s Baram parliamentary constituency due to flooding, with voters seen standing knee-deep in floodwaters.

Citing recent developments in the United Kingdom whereby the then prime minister Liz Truss was changed in 45 days after appointment, it goes to proof that rotating prime minister – a swap method that allows the government to exist without the need of one majority party – is possible, said Barjoyai.

Fundamentally, Malaysia’s economy is strong but the current scenario would somewhat still affect investor sentiment albeit in the short term, said Professor Datuk Dr Shazali Abu Mansor, deputy vice-chancellor of research and graduate studies at i-CATS University College.

Investors would probably adopt a wait-and-see attitude until a new government is formed, he said.

Professor Dr Mohd Nazari Ismail from Universiti Malaya’s Business and Economics Faculty said there are many scenarios and it really boils down to the outcome of negotiations between the parties.

GE15 saw three major coalitions, namely Barisan Nasional, PH and Perikatan Nasional (PN) versus the previous election, which had only Barisan and PH.

“If one party won, the political situation will be more stable; if the results are even, two parties will work together to form a government but we don’t know who will cooperate with whom at this point of time,” he said.

“We should not rule out the potential scenario of ‘unthinkable’ alliance,” Maybank Investment Bank’s analyst, Suhaimi Ilias, had also said prior to the GE15 itself.

He said another possibility is a “minority” government due to a “hung” Parliament outcome or a stalemate among parties in forming a coalition government with a simple majority.

No guessing on policy changes and impact of such a scenario. It will be a period of uncertainty but discovery for everyone including the economy and the market, he noted

Regardless of the outcome, fiscal consolidation will remain a priority although the path could be different depending on which party or alliance that leads the government, said Suhaimi.

In terms of government expenditure, “people-oriented” measures will continue, especially the cash handout programme that has been in existence since the time of pre-GE14 Barisan government and went through name changes to reflect the government of the day.

“What we expect – as per the cash handouts – is for other assistance to become more targeted such as subsidy restructuring to a targeted mechanism from a blanket system and the rationalisation of various social safety net and welfare programmes.

“We also expect the post-GE15 government to proceed with the tabling of the Fiscal Responsibility Act that was mentioned in the Budget 2023 speech.”

He said major infrastructure projects would continue for projects now under construction – East Coast Rail Link, Gemas-Johor Bahru (JB) Electrified Double Track, JB-Singapore Rail Transit Link, Pan-Borneo Highway and Sabah-Sarawak Link Road – and for projects in which tenders have started – the Klang Valley Mass Rapid Transit Line 3.

The expectation is also for a higher share of the federal government development spending allocation to the less-developed states for basic infrastructure.

“The new federal government is expected to focus on improving the quality and delivery of essential public services, especially education, training and healthcare, as well as realising higher and quality investment flows to the less-developed states for a more inclusive, equitable and balanced socio-economic developments.”

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