Power over national finance

IN our system of “parliamentary government”, an elected and representative parliament is the central pillar of democracy.

Under the Federal Constitution, 57 out of 183 Articles deal with Parliament’s multifarious functions:

> Providing constitutional basis for the Yang di-Pertuan Agong’s discretionary decision to appoint a Prime Minister under Article 43(2);

> The legislative function of enacting, amending or repealing laws;

> Scrutiny of executive policy and performance;

> Oversight of national expenditure;

> The Dewan Rakyat representing the 222 constituencies;

> The Dewan Negara representing the 13 States, Federal Territories, and minorities;

> “Constituency function” of redressing constituents’ grievances;

> Scrutiny of emergency powers under Article 150;

> Scrutiny of the Election Commission’s proposals for electoral boundaries;

> Safeguarding of Malay Reserves; and

> Enforcement of parliamentary privileges to ensure compliance with Parliament’s decisions and orders.

Today’s column will confine itself to Parliament’s control over national finance. This function encompasses oversight of financial policy; examination of the use of financial resources optimally; allocation of the annual budget; and review of the Auditor-General’s (A-G) annual admonitions about how allocations were used.

Regrettably, the Parliament of Malaysia plays very little, if any, role in long-term economic policy. Though we observe the formality of budget debates, the Executive monopolises economic policies and determines how much tax is to be raised and how it is to be spent. Parliament merely legitimates executive policies.

In the past, disproportionately large allocations for the Prime Minister’s Department gave to the PM much leeway to play out “cash is king” policies. The so-called annual budget is always followed by supplementary budgets, which modify significantly the thrust of the main budget.

The jurisdiction of the Dewan Rakyat’s Public Accounts Committee is limited to those agencies audited by the A-G, who does not have oversight over all the institutions receiving or generating public funds.

Some, like PETRONAS, are exempted from the A-G’s scrutiny and organise their own financial audits.

The 1MDB scandal illustrates how ineffective Parliament (and other oversight institutions) can be in checking executive misfeasance in the financial field.

Last Thursday, chairman of the Dewan Rakyat Public Accounts Committee (PAC) Datuk Mas Ermieyati Samsudin lamented that many witnesses, especially top government officials, past and present, who were mentioned in the A-G’s report, often refuse to appear before PAC proceedings.

It is also known that in utter disrespect to the House, senior civil servants, when summoned, often send their junior colleagues to appear before the PAC.

Mas Ermieyati’s response to this situation is to threaten to reveal the names of these witnesses and request for help from the Chief Secretary to the Government as well as the Public Service Department director-general.

Actually, the Dewan Rakyat itself has the power to come down heavily on these defaulters, no matter how high and mighty they might be.

Under Sections 16-17 of the Houses of Parliament (Privileges and Powers) Act 1952 (Act 347), the House or any Committee of the House can order the attendance of witnesses and production of documents.

Any non-compliance or non-cooperation by a member or outsider can be adjudged by the House to be a contempt of the House under Section 9, and punished with a fine of RM1,000 or detention until the fine is paid or until the House is dissolved or prorogued.

Under Section 29, a few enumerated acts of contempt can be prosecuted in the courts and punished with imprisonment for up to 60 days.

In exercising its function of enforcing its privileges, the House has the power of the courts to enquire into contraventions (Sections 4-5); issue warrants (Sections 11 and 14); and examine witnesses (Section18). False or misleading answers may amount to crimes under Section 193 of the Penal Code.

Entry and search of premises can be authorised by Parliament under Section 18.

Under Section 28, the President and Speaker of the Houses can act notwithstanding the dissolution or prorogation of Parliament.

The police and every other person are duty bound to assist the House (Section 14).

An interesting question is: “Who is subject to the privilege jurisdiction of the House?” The answer is that outsiders, MPs, senators, individual ministers and even the Cabinet collectively are not immune from the privilege jurisdiction of the Houses.

Readers may be surprised to learn that in South Australia in 2021, deputy premier Vickie Chapman was found guilty of contempt for wilfully misleading the House and for having a conflict of interest in a planning decision.

In Canada in 2008, the Royal Canadian Mounted Police deputy commissioner was cited for contempt for misleading a parliamentary committee. In 2011, the entire Cabinet of Canada was found in contempt of Parliament for not meeting opposition members’ request for details of proposed Bills and their cost estimates. A motion of no-confidence was introduced and passed to force an election. This was the first time in the history of the Commonwealth that the entire Cabinet was found guilty of contempt!

History was repeated in the United Kingdom in 2018 when the Cabinet was held in contempt of Parliament for failing to supply the full report by the Attorney General on Brexit. In 2023, former PM Boris Johnson was found guilty of contempt for misleading Parliament about “partygate” during the Covid-19 restrictions.

Even if these overseas examples are found too extreme for Malaysia’s culture of conformity to authority, the point is that in law, Parliament is not powerless to deal with anyone who treats it with disrespect and who obstructs it in its role as the grand inquest of the nation.

It is submitted that the Houses of Parliament should shed their reluctance to cite or fine for contempt any MP or minister who defies Parliament’s authority.

To strengthen Parliament’s ability to scrutinise national finance, we could emulate Australia and set up a non-partisan Budget Office to advise MPs on the holistic long-term implications of the government’s budgetary policies. Alternatively, a new Parliamentary Committee on Financial Policy and Expenditure could be set up to examine the thrust of the government’s monetary proposals.

The jurisdiction of the A-G and the PAC should be extended to cover all public institutions receiving or generating funds.

In accordance with the immunity conferred by parliamentary privileges, the Official Secrets Act’s inapplicability to parliamentary or committee proceedings should be recognised.

Authority for this can be found in Article 63(2) of the Federal Constitution and Sections 3, 7, 8, and 32 of Act 347.

In the case of Seck Mun Foo v Datuk Haris Mohd Salleh (1997), it was clearly held that any information may be discussed in parliamentary proceedings “even though the disclosure may otherwise be held to be a breach of the Official Secrets Act if it is done outside Parliament”. Hence, no audit reports should be withheld from Parliament.

There is a learned proposal that the 1952 law on parliamentary privileges should be amended to enhance the penalty for contempt from RM1,000 to a much larger sum. It is humbly submitted that justice is not in legislation but in the expeditious administration of the law fairly, justly and equally.

It is not the severity but the certainty of sanctions that has a greater deterrent effect.

Emeritus Prof Datuk Dr Shad Saleem Faruqi is Holder of the Tunku Abdul Rahman Chair at the Faculty of Law, Universiti Malaya.

The views expressed here are the writer’s own.