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OCTOBER 6 — After the recent Pakatan Harapan (PH) presidential council meeting, Prime Minister and Chairperson of PH, Tun Mahathir, highlighted that PH’s financial situation is at a critical level and needs funds to stay afloat.
This is indeed an important issue in the context of Malaysia Baharu, as it is closely linked to the reform on political financing.
For many years, Umno and BN has resorted to patronage, money politics, and rent-seeking to sustain their political activities and survival. This is best explained by the seminal work of Prof. Edmund Terence Gomez and Prof. KS Jomo entitled Malaysia’s Political Economy: Politics, Patronage and Profits published in 1999.
Alternatively, some may even resort to more direct measures, such as kleptocracy and “donations”, for political (and personal) funding.
Therefore, PH should foremost be commended for thinking through this issue critically, as opposed to resorting to Umno-BN’s method of patronage, abuse of state funds, and kleptocracy to sustain their political survival.
PH’s manifesto on political financing
Tun Mahathir need not go far to look for a possible solution. PH’s manifesto itself has already stated the correct policy direction on political financing.
As per Promise 18 of the manifesto, PH has pledged to introduce a new Political Financing Control Act, with the following main principles:
- Political parties that qualify will receive annual funding from the Government according to a formula that is transparent and consistent
- All political contributions must be from sources that can be identified
- Political parties must submit audited financial report every year
- Political parties cannot have assets in excess of RM1 billion
- Government-owned companies are not allowed to make political contributions
In essence, there are three main components to the above pledge. First, the transparency of political funding and expenditure must be more transparent to allow for public scrutiny.
Secondly, political parties can still raise private funds, but with restrictions so as to not give rise to corruption of high concentration of power and resources.
Thirdly — the most important and progressive — is the introduction of a new system of public financing for political parties, which was also mentioned by Tun Mahathir in his press conference.
Public Financing for Political Parties
Public funding for political parties means political parties will receive funds from government to run the party machinery and activities.
Political parties will receive a certain amount of money yearly from the government, based on a fair formula — for example based on the proportion of popular votes in the last General Election. Further studies and discussion with stakeholders are of course necessary to ensure the best and most equitable way to distribute the funds.
In return, parties that receives public funding must adhere to strict reporting procedure, provided by law, to avoid funds being misused or misappropriated.
There are definitely counter arguments for this approach as well — such as increased burden of government and taxpayers to “fund democracy” as opposed to more pressing economic or social needs.
In the long run however, public financing for political parties will ensure a fairer playing field, reduces the burden of political parties to fundraise, and reduces political corruption.
It is undeniable that the stabilising and improving the economy of the country deserves the utmost priority of the government. However, this discourse on political financing, as brought up by Tun Mahathir himself, shows that urgent need for political reform as well.
There is a whole wide range of political reforms that must start now — among others besides political financing, on elections, parliament, judiciary, and MACC.
Political reforms must move in tandem with economic reforms — for only when the democratic institutions and processes are strong and resilient, can we expect to avoid a repeat of the predicaments left by Umno-BN.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.