KUALA LUMPUR, July 3 — Several lawmakers on both sides of the divide have endorsed a suggestion by CodeBlue for legislative amendments to require parliamentary approval or oversight of federal spending cuts.
In a poll of eight MPs and a senator, all except one MP supported the principle of mandating the government to present proposed spending cuts to Parliament, instead of the current situation where the Ministry of Finance (MOF) has unilateral power to reduce or divert allocations between ministries without disclosure to the House.
The parliamentarians simply differed in their preferred mechanism – such as either tabling bills for spending cuts or presentation to a parliamentary special select committee (PSSC) – and the size of budget cuts to trigger a requirement for parliamentary oversight.
CodeBlue had asked their views about its proposal to enact a new law or amend the Public Finance and Fiscal Responsibility Act 2023 to require parliamentary approval for budget cuts in the current fiscal year – suggesting a minimum threshold at 1 per cent of a ministry’s budget – similar to how federal spending cuts in the United States are generally required to be approved by Congress.
MCA president Wee Ka Siong, who previously served as transport minister and minister in the Prime Minister’s Department under different administrations, said ministries should remain free to recalibrate allocations internally, but overall budget cuts must require the tabling of bills for parliamentary approval.
“The quantum can be discussed, but the principle is that if the budget comes from Parliament, it has to go back to Parliament,” Wee, who is also Ayer Hitam MP, told CodeBlue.
He pointed out that prior to recent spending cuts, the Ministry of Health (MOH) only received RM1.25 billion more for its 2026 budget than 2025, a modest 2.8 per cent increase far exceeded by a 7 per cent salary increment for civil servants in the management and professional (P&P) group in January this year.
The former minister also noted that the federal government has an RM2 billion contingency fund every year.
“If you play around with that contingency fund, which has been budgeted for, then it shouldn’t be a problem. But if cuts exceed RM2 billion, then the government must go to Parliament.”
Prime Minister Anwar Ibrahim, who is also the finance minister, told Parliament in a written Dewan Rakyat reply last Tuesday that the cost of petrol and diesel subsidies was estimated to reach nearly RM40 billion this year if current market prices held.
This is RM25 billion more than the RM15 billion allocated for fuel subsidies under the 2026 budget. RM25 billion comprises 5.9 per cent of the total RM421.2 billion budget that required parliamentary approval and 7.4 per cent of RM338.2 billion allocated for operating expenditure (opex).
The government has yet to explain how it’s funding the large hole in the budget; opex like subsidies can’t be financed with debt.
The MOH disclosed recently that it received an RM500 million opex restriction warrant from the MOF last June 5, describing it as a “technical adjustment to surplus allocations for vacant positions that cannot be filled this year.”
However, the ministry insisted that the half a billion ringgit cut – which comprised 1.1 per cent of MOH’s total RM46.5 billion budget – wouldn’t affect the 18,641 posts approved by the Public Service Department (JPA) for MOH for 2026.
In a written Dewan Rakyat reply yesterday to a few MPs asking about health budget cuts, Health Minister Dzulkefly Ahmad simply said the RM500 million opex restriction warrant didn’t affect “important” services at MOH health care facilities, but didn’t specify the kind or number of staffing positions that the ministry couldn’t or wouldn’t be able to fill now.
Over the past several weeks, government hospitals have faced service disruptions due to severe staff shortages, crucially of doctors.
Kuala Langat MP Dr Ahmad Yunus Hairi said introducing legislation to require Parliament to approve any form of government spending cuts merited consideration, as its objective was to strengthen Parliament’s checks and balances over management of the nation’s finances.
The PAS lawmaker pointed out that currently, although any increase in government expenditure must be approved by Parliament through a supplementary supply bill, reductions or freezes in budget allocations implemented through restriction warrants fall under MOF’s administrative authority and do not require parliamentary approval.
“Restriction warrants are a standard fiscal management instrument used to manage the government’s cash flow and adjust spending priorities in line with the prevailing fiscal position. As such, the government should retain a certain degree of flexibility to make administrative adjustments without undermining the efficiency of financial management,” Dr Ahmad Yunus told CodeBlue.
“However, where budget cuts involve substantial amounts or have the potential to affect the delivery of critical public services, such as the health sector, the government should explain and be accountable for those decisions to Parliament.
“As for the proposal to establish a threshold, such as 1 per cent of a ministry’s allocation, the matter requires further study. A threshold that is set too low could undermine administrative efficiency, as every minor adjustment would have to be referred to Parliament. Conversely, a threshold that is set too high could weaken Parliament’s oversight of significant changes in government expenditure.”
He also urged the government to provide a detailed explanation of the RM500 million opex restriction warrant on the MOH.
Gopeng MP Tan Kar Hing from PKR told the MOF and MOH to share clear financial data and risk reports with Parliament on the RM500 million spending cut.
“By the spirit of the Fiscal Responsibility Act, I agree that the government needs to increase transparency. Having Parliament debate these cuts would show the public exactly how policies are shifting,” Tan told CodeBlue.
“For example, if the RM500 million health cut happened because money had to be moved to fuel subsidies, the government should openly justify that move in Parliament.
“Additionally, a joint committee of government and opposition lawmakers could act as the first line of review. If a budget change is just a minor, routine adjustment, this committee could approve it immediately. However, if the change represents a major shift in government policy, it must go to the full Parliament for an open debate.”
Machang MP Wan Ahmad Fayhsal Wan Ahmad Kamal, who is also Wawasan information chief, supported legislative or regulatory amendments to require the government to present significant budget cuts to a PSSC or the full chambers of the House.
The threshold for triggering parliamentary review should be discussed by a select committee.
“My position is not that the government must return to Parliament for permission every time it wishes to reduce previously approved spending — that would be excessively rigid and hamper legitimate fiscal management. What I am calling for is accountability, not a veto,” Wan Ahmad Fayhsal told CodeBlue.
“An approved Budget carries a moral and political obligation on the Executive to spend prudently. It is not, in strict legal terms, a mandatory instruction to disburse every ringgit allocated. But that flexibility cannot come at the cost of transparency.
“When the Treasury decides to cut or withhold spending from an allocation Parliament has already approved, it has a duty to explain that decision to this House in detail — the rationale, the quantum involved, and critically, the impact on service delivery in the ministries affected.”
Senator Dr RA Lingeshwaran said while introducing a rigid, US-style legislative hurdle for every minor budget adjustment risked causing executive gridlock and hindering the government’s agility to react to global macroeconomic shocks, the spirit of CodeBlue’s proposal – ensuring Executive accountability – was highly valid.
“Rather than enforcing a full parliamentary vote for every minor adjustment, a more balanced reform for Malaysia would be amending our fiscal procedures to require that any restriction warrant exceeding a significant threshold be automatically referred to the PSSC on Finance and Economy or even PSSC for Health for this matter, for transparent scrutiny,” the DAP lawmaker told CodeBlue.
When asked about his suggested threshold, Dr Lingeshwaran said applying a flat percentage across the board would create a massive scale disparity between large ministries like the MOH or the Education Ministry, for which a 1 per cent cut represented hundreds of millions of ringgit, and smaller ministries with an RM500 million budget.
“To me, a cut is deemed significant if the affected ministry is not able to provide its usual service due to the proposed budget cut.”
Kapar MP Dr Halimah Ali from PAS said enacting or amending legislation to require parliamentary approval for budget cuts sounded “reasonable”.
“I think the government should categorise their ministries according to the degree of critical needs for the people under that ministry,” she told CodeBlue. “Health, education, and welfare shouldn’t be touched.”
Subang MP Wong Chen from PKR suggested thresholds of minimum 5 per cent and 20 per cent cuts to a ministry’s operational and development budgets respectively before triggering the requirement for parliamentary approval.
His party colleague, Selayang MP William Leong, similarly touted a threshold of 5 per cent or higher, saying: “There should be some flexibility, but substantial cuts to be used for other purposes should go back to Parliament for approval.”
Galen Centre: Create Appropriations Committee, Independent Budget Office
Galen Centre for Health and Social Policy chief executive Azrul Mohd Khalib disagreed with requiring bills to be tabled for spending cuts.
Instead, he suggested establishing a new PSSC – a standing Appropriations Committee similar to the US and Australian systems – to review the presentation of proposed budget cuts.
Appropriations Committee hearings must be open to the public, he stressed, unlike the Parliament’s current Standing Orders that place PSSC proceedings under the Official Secrets Act (OSA) 1972, pending the tabling of the select committee’s report and Hansard that often occurs only months or sometimes even more than a year later.
“If the main budget needs to go through public scrutiny, why should we expect anything less when there are changes to what was agreed upon previously? The threshold should be 1 per cent or higher,” Azrul told CodeBlue.
“For example, if the Ministry of Health is going to undergo RM 500 million cuts in its budget as recently reported, that proposal would definitely fall under this proposal and would require referral to the select committee on appropriations for hearings and approval before the Executive can proceed.”
The Galen Centre also proposed the establishment of a non-departmental public body or a strictly nonpartisan federal agency – as an equivalent to the United Kingdom’s Office for Budget Responsibility (OBR) or the US’ Congressional Budget Office – to provide objective, independent analysis of budgetary measures and economic issues.
“t would help to depoliticise economic forecasts, be responsible for evaluating the government’s fiscal targets, and assess long-term public finances. It would help both government and opposition parliamentarians to improve their insights into economic matters and provide oversight to the Executive,” said Azrul.
He stressed that the task of parliamentarians shouldn’t stop at approving annual and supplementary budgets because there must be a balance between Executive and Parliamentary powers, especially on the issue of budgetary oversight, to allow for good governance and administrative flexibility.
“1MDB, the Covid-19 pandemic years, and this recent Hormuz crisis have shown clearly the need for this, especially when the prime minister is also the finance minister, which weakens governance.”
Requiring Parliamentary Approval For Budget Cuts May Backfire On MOH
A senior civil servant warned CodeBlue that requiring parliamentary approval for budget reductions cut both ways, pointing out that this would give ministries an avenue to oppose diversion of their allocations to the MOH.
“If for example, MOH requires an additional budget and MOF would like to take the budget from another ministry, that minister may object to MOF‘s actions to divert the budget to the MOH by blocking in Parliament,” he said on condition of anonymity, as he wasn’t authorised to speak to the press.
“Whereas now, MOF has full discretion to divert the budget without seeking permission from the ministry.
“In the end, MOF will not even bother entertaining requests from MOH for additional budget because they do not want the hassle of going to Parliament to seek approval to cut the budget from some other ministry to divert to the Ministry of Health.”
Seputeh MP Teresa Kok was the only legislator in CodeBlue’s poll to oppose a proposed requirement for parliamentary approval of spending cuts.
The former primary industries minister pointed out that even in normal years, many government agencies sometimes don’t receive their allocated funding or get the money very late whenever MOF faces cash flow problems. These cuts and delays aren’t announced publicly.
She also said ministries don’t receive their total annual allocations in January; sometimes they might even end up not receiving the full amount for the year, while projects announced during budget speeches may also be cancelled.
As such, the DAP lawmaker was fine with the status quo to give MOF more space in managing government funding, especially in unexpected circumstances.
“Under our current system, supplementary supply bills are mandatory when the government needs additional funds beyond the approved national budget,” Kok told CodeBlue.
“However, giving the executive branch the administrative flexibility to issue restriction warrants — or safely divert unutilised funds from one area to another — is essential for day-to-day governance.
“If the government had to table a bill in Parliament every time a ministry optimised its internal spending by 1 per cent, the legislative machinery would face gridlock, slowing down urgent reallocations for emergencies or shifting economic needs.”