How the Federal Constitution Protects Consolidated Funds

0

AS reported on Friday, the government announced one of the biggest budgets in Malaysia’s history, allocating RM372 billion in federal spending.

Every budget is essentially an appropriation bill, before it is passed as an appropriation bill. The bill must contain the estimated financial needs for the year concerned, in accordance with Article 100 of the Federal Constitution.

As provided by Dewan Rakyat Standing Order 65, details of these financial requirements in the draft estimate of federal spending for the following year are to be laid “on the table prior to introduction to the House.”

The Appropriation Bill, or better known as the Budget, must be passed by parliament and assented to by the King. The bill then becomes an Act of Parliament, a federal law that authorizes the government to spend.

All government revenues and monies received must be accounted for in the Consolidated Fund, under Article 97 of the Federal Constitution.

Section 97(1) of the Federal Constitution states the following: “All revenues and moneys collected or received by the federation shall be subject to the provisions of this constitution and of federal law to be paid into and out of one fund. This fund is known as the Consolidated Fund.

Section 97(2) provides that all revenues and monies of whatever nature collected or received by a State shall, subject to clause (3), be paid into and out of one fund. This is called the Consolidated Fund of that State.

The Federal Constitution protects and protects the Federal Consolidated Fund in several ways.

Firstly, article 98 of the Federal Constitution sets the expenses charged to the Consolidated Fund, which are:

  • It shall be charged to the Consolidated Fund, in addition to any grant, remuneration, or other sums so charged by any other Federal section or statute –
    • all pensions, indemnities for loss of office and gratuities payable by the Federation;
    • all debt charges for which the Federation is responsible; and
    • any sum of money required to satisfy any judgment, decision or award against the Federation by a court or tribunal.

Second, Article 99(1) of the Federal Constitution requires that the annual financial statement be filed with the Dewan Rakyat.

This is a statement of the federation’s estimated income and expenditure for the year.

Unless Parliament directs otherwise, this declaration must be tabled before the start of this year. This explains why the 2023 budget must be tabled and adopted before the start of 2023.

Article 99, paragraph 2, stipulates that the estimated expenditure must indicate:

  • the total of the sums necessary to meet the expenses charged to the consolidated funds, and
  • subject to paragraph (3), the sums necessary to meet expenditure for other purposes which it is proposed to pay out of the Consolidated Fund.

Third, section 104, authorized withdrawals from consolidated funds, provides the following:

  • Subject to subsection (2), no amount may be withdrawn from the Consolidated Fund unless it is:
    • at the expense of the Consolidated Fund; Where
    • authorized to be issued by an appropriations act; Where
    • authorized to be issued under Section 102 (authorized for consideration or for indefinite purposes).

Clause (1) does not apply to the sums mentioned in clause (3) of section 99.

No monies may be withdrawn from the Consolidated Fund except as provided by federal law.

The Federal Constitution protects and safeguards the Consolidated Fund. In short, the Consolidated Fund is protected by requiring the government to spend in accordance with the authority of Parliament.

As such, the 2023 budget is a requirement under the Constitution. It is for the deputies to be presented and possibly to debate the proposed expenditures before adopting them to become an appropriation bill.

Now, Section 101 allows the government to introduce a Supplementary Appropriation Bill if:

  • the amount appropriated by the Appropriations Act for any purpose is insufficient or it is necessary to make expenditures for a purpose for which no amount has been appropriated by the Appropriations Act; Where
  • that sums have been expended for a purpose in excess of the amount (if any) appropriated for that purpose by the Supply Act,
  • a supplementary estimate showing the sums required or expended is tabled in the House and the objects of such expenditure are included in an appropriation bill.

It underlines the requirement that public expenditure must be approved and authorized by parliament.

The Federal Constitution clearly states how and in what manner the Consolidated Fund may be used by the government.

This ensures responsible government that spends as authorized by the people for the people. – October 10, 2022.

* Matilda George reads The Malaysian Insight.

* This is the opinion of the author or publication and does not necessarily represent the views of The Malaysian Insight. The article may be edited for brevity and clarity.

Share.

Comments are closed.