Anwar to thrive in vote of confidence

Apart from the vote of confidence, the tabling of a new Budget 2023, voting of a new Dewan Rakyat Speaker and 2 deputy speakers are among the highlight of this Parliament sitting 


ALL eyes will be on the Dewan Rakyat today and tomorrow as newly appointed Prime Minister (PM) Datuk Seri Anwar Ibrahim tabled the vote of confidence to dispel any concerns about the legitimacy of his Unity Government particularly after criticism and challenge from former PM Tan Sri Muhyiddin Yassin who urged the former to prove his number through a vote of confidence. 

Analysts and economists who spoke to The Malaysian Reserve (TMR) said Anwar would not face any problem with the vote of confidence that will be table when the Dewan Rakyat sits for the first session of Parliament’s 15th term today and tomorrow. 

Anwar will not face any difficulties with his move for the vote of confidence due to his receiving the support of more than 140 MPs from various political parties and coalitions

Last Friday, Anwar-led Pakatan Harapan (PH) signed a Cooperation Agreement with four major coalitions — Barisan Nasional (BN), Gabungan Parti Sarawak (GPS), Gabungan Rakyat Sabah (GRS) and Parti Warisan to ensure political stability and drive the country’s economic growth. 

Anwar To Make the Cut with Ease

Political analyst Dr Jeniri Amir believed that Anwar will not face any difficulties with his move for the vote of confidence due to his receiving the support of more than 140 MPs from various political parties and coalitions. 

“It shows that he is very formidable on the back of strong support hence, there is no reason for the MPs to withdraw their support or change their stand. 

“It is also important to take into consideration that if the MPs withdraw their support, it will not look good for the political parties backing Anwar. Furthermore, the formation of the Unity Government was also rooted by the King. 

“In my opinion, if Anwar has no confidence that he will win this vote of confidence then definitely he will not carry it out,” he said to TMR recently. 

Jeniri believes the vote of confidence will indirectly inform everyone especially the Opposition on the majority that the Anwar-led Unity Govt commands

Furthermore, he noted that the vote of confidence is in accordance with the practice of Parliamentary democracy in resolving the mandate’s validity to lead which is not only excellent for political legitimacy but also for rectifying the government’s image in the eyes of both the local and international community. 

He also believes that the vote of confidence will indirectly inform everyone especially the Opposition on the majority that the Anwar-led Unity Government commands. 

Agreeing with Jeniri’s view, Universiti Utara Malaysia’s politics and international relations Assoc Prof Dr Mohd Azizudin Mohd Sani opined that Anwar will win the vote of confidence because he doesn’t think it’s in the MPs’ best interests to see the government fall apart again. 

“As such, I anticipate 148 MPs supporting Anwar to lead the country which then results in a two-third majority triumph,” Mohd Azizudin said when contacted recently. 

On the other hand, Singapore Institute of International Affairs senior fellow Dr Oh Ei Sun opined that there will be a lot of political manoeuvring before and even after the vote of confidence. 

“Perikatan Nasional (PN) would ideally prefer to destabilise the Unity Government led by Anwar through the vote of confidence, but it can do so at any time by flipping some of those MPs from backing the government. 

“This is because the Anti-Hopping Law does not explicitly prohibit MPs from publicly expressing support for a prime ministerial candidate who has not been approved by their respective party leaderships,” he said to TMR. 

Don’t Feel Too Comfortable with The Vote of Confidence Outcome

He also advised Anwar not to get carried away by the vote of confidence’s outcome and instead, to be wary if PN and parts of Umno that are not aligned with party president Datuk Seri Dr Ahmad Zahid Hamidi will try to sideline him. 

“Anwar should not be overly ambitious and should consider himself fortunate if he can muster a simple majority during the vote of confidence, which is sufficient to confirm his political legitimacy in any event. 

The PN side, together with those sections within Umno who are not aligned with Ahmad Zahid, would undoubtedly try to chip away at even such an easy majority,” he added. 

Nevertheless, Malaysia University of Science and Technology economist Dr Geoffrey Williams opined that the vote of confidence will be valuable to clarify the level of support for Anwar as PM and for the new Unity Government. 

“He will, of course, win the vote of confidence comfortably and this will reaffirm his position, and be good for the market and investors’ confidence too because he is also the finance minister. 

“It will mean he has the support to push forward on reforms, especially in governance, corruption and breaking up the anti-competitive cartels and monopolies. This will be good for domestic and international business confidence,” he told TMR. 

The vote of confidence is among the key agendas that most Malaysians will be focusing on in the current Parliament sitting as the PM previously announced that he would conduct the vote of confidence when Parliament reconvenes on Dec 19. The vote of confidence aims to rectify his mandate to lead the country based on the majority support from the MPs. 

A New Budget For 2023? 

Other key agenda that the current session is focusing on would be the re-tabling of Budget 2023. 

On this, Williams opined that Anwar should table a completely new budget replacing the one tabled by his predecessor Tengku Datuk Seri Zafrul Tengku Abdul Aziz. 

“We need credibility in economic policy focused on sustainable growth, low-inflation and helping recovery in incomes, businesses and savings. The new budget should scrap the handouts in Budget 2023 and focus on a more stable, low inflation trajectory coordinated with interest rates set by Bank Negara Malaysia. We should not see expansionary fiscal policy forcing higher inflation and higher interest rates. 

We need credibility in economic policy focused on sustainable growth, low-inflation and helping recovery in incomes, businesses and savings, says WIlliams

“The total expenditure will only increase in line with inflation to around RM345 billion and revenues should aim for a similar level to 2022 around RM285 billion. So, there would be a smaller deficit which will provide a buffer in case the economic slowdown next year is tougher than predicted,” he said. 

He also added that it would be interesting to combine suggestions across coalitions — namely BN’s Assistive Basic 

Income and PH’s Humane Economy agendas which can all be accommodated successfully within existing budgets. 

Additionally, he also highlighted that the new budget should also be an incentive for flexible working and lower taxes on secondary income because it would help people to rebuild their pensions and there should not be any upper limit and higher tax exemption limits on voluntary contributions. 

“The PH proposal for a Parliamentary Budget Office should be established to scrutinise the budget. The government should provide funding for independent assessment and forecasts of the budget and its effects,” he further explained. 

Govt should have a 5-year view of what they want to do and how to strengthen the budgetary situation, says Nungsari

Sharing the same view, economist Dr Nungsari Ahmad Radhi stated that the previous budget will see some adjustments in-line with the formation of the Unity Government. 

“The question is how much will it be changed? The assumption on revenue would not change much unless there are new sources of revenue. 

“On the expenditure side, there’s very little discretionary space for operating expenditures as a big chunk of it are committed expenses like emoluments, pensions and debt servicing expenditures. There could be changes in the way the government delivers services but we’ll see. “The development expenditures side is a relatively small part of the budget but possibly has more space for changes unless they involve projects already started,” he said to TMR recently. 

Focus Area For ‘New’ Budget 2023

On what aspect should Budget 2023 be revised for the betterment of the people, Nungsari said the government should have a five-year view of what they want to do and how to strengthen the budgetary situation (more importantly) rather than just a yearly budget. 

“The plan will subsequently be translated into five years budget beginning by 2023. There is an urgent need to get the government’s finances in shape, which will necessitate a longer view of the situation, a complete overhaul of the revenue side, which is currently incapable of supporting even operating expenses, as well as a thorough rethinking of the expenditure side’s efficiency and effectiveness and how to manage liabilities in light of a higher interest rate regime. 

“I suppose the development side necessitates the Treasury collaborating with the Economic Planning Unit (EPU) in prioritising projects, keeping in mind that all development expenses would be borrowed,” he further explained. 

Meanwhile, Williams stated that the budget should focus on changing the business environment and making it easier to do business rather than creating handouts. 

“We can see that whenever there is a handout scheme that requires applications and approvals, two things tend to happen — potential beneficiary companies do not apply — either because they are unaware of the schemes or because the application process is too difficult; and leakages or corruption occur when the approval is in the hands of someone with authority. As a result, we have an unproductive and inefficient system that does not perform at its full capacity. 

“Therefore, schemes, projects or concessions should be avoided in favour of removing regulations and freeing up the business environment. Hence, most of the hand-out-based schemes should be removed because they have the same problems with inefficient and ineffective systems,” he added. 

Azhar steps down from his post in line with the Federal Constitution, paving the way for a new Speaker to preside the 1st session of the 15th Parliament

He also mentioned that Malaysia has made a good start to enhancing competition by addressing cartels, monopolies and supply-side concerns and highlighted that it is crucial to analyse existing initiatives and identify new business prospects. 

Furthermore, he stated that welfare support should be reformed to switch to a Universal Basic Income, which BN had proposed in its manifesto.
“There is scope to widen this and make 

it more generous to remove adhoc welfare payments due to the welfare system has become very ineffective. 

“Hence, attention should be focused on pension reform to encourage more saving and introducing a Universal Basic Pension scheme. To encourage more savings, voluntary saving incentives should be improved to raise the limit and give generous tax benefits for savers,” he suggested. 

Meanwhile, as tax reform is not addressed in both PH’s and BN’s manifesto, he asserted that it is a blank slate that can be used to help create revenue alternatives — where it requires a comprehensive assessment and not just an ad-hoc concern like the Goods and Services Tax, as international tax changes such as the Global Minimum Tax will be impacted immediately. 

“In a more general term, there should be independent forecasts on the economic outlook and scenarios. 

Funding should be provided for independent forecasters and the establishment of the Parliamentary Budget Office is also an important reform in this respect. 

“We are seeing a good start to subsidies reform and addressing the cost of living, and those should be emphasised. 

“The government needs to address the pensions crisis with 96% of Malaysians with insufficient savings for a decent pension. We need a Universal Basic Pension and full pension reform. This must extend to social protection so we need a Universal Basic Income as proposed by BN. At the same time, the government also needs to fix National Higher Education Fund Corp (PTPTN) as the higher education funding is unstable,” Williams said. 

Simultaneously, Bank Islam Bhd’s economist Firdaos Rosli stated that there are a few key areas to focus on should Budget 2023 be revised — the global oil price projection, the new government’s fiscal priorities and the revision of the 12th Malaysian Plan (12MP).

“First, the government must look into the global oil price assumption. When Budget 2023 was first announced, the global oil prices were assumed to average at US$90 (RM398.70) per barrel in 2023, but now, it is about US$75-US$80 per barrel, and it will trend lower amid lower global growth. So, they should take a more conservative and prudent stance as petroleum-related revenues may come in much lower than the Finance Ministry’s earlier projection. Due to our narrow tax base, global oil price assumption becomes more prominent in our budget design.

“Second is the global growth moderation in 2023. The government should reconsider its fiscal deficit target, which falls within the constraints of the Medium-Term Fiscal Framework. As it stands, assuming everything else remains constant, the government is likely to choose to trim spending, which will, in turn, affect growth in the year.

“There are only two parts from the expenditure side — operating expenditure (opex) and development expenditure (devex). They will probably trim opex but devex will probably be somewhat similar. We need to create the right multiplier in the coming year due to the global growth moderation. Inevitably, Malaysia’s GDP growth will come in lower not only because of the high correlation with major economies but also due to lower spending. Bank Islam projects growth in 2023 to come in at 4.5% versus 8.1% in 2022.” he added.

Align the Budget With 12MP

He also added that the current government’s budget needs to be aligned with the 12MP projections.

“Thirdly, we have also to consider that 12MP was designed by the previous administration. With that in mind, it would be more apt for the current government to re-examine the 12MP. They need to design a policy that they can sustain and deliver for the next five years.

“The problem right now is the continuity perspective of the 12MP. If Economy Minister Rafizi Ramli reviews 12MP (which spans up to 2025), the government must go back to the drawing board in 2024 to chart 13MP. It may disrupt the government’s spending. There is a tendency for Malaysia to record higher growth when political and development cycles are aligned.

“I think they should review 12MP, rename it to 13MP and have a five-year undisrupted spending plan. This should be done next year for the mid-term review of the 12MP. If there are too many changes to the Malaysian Plan, again, it will disrupt the country’s growth momentum. No matter whoever is in power, the five-year spending plan must be in our national interest,” he further added.

In conclusion, he stated that although he is not expecting an overhaul of the budget, there should probably be adjustments due to time constraints.

“It is unfortunate that GE15 was held in November when the Budget was still tentative. Financial priorities now should be about ensuring the smooth running of the government. They can table an updated budget for growth later,” he further explained.

Voting of New Dewan Rakyat Speaker, Deputy Speakers

Apart from the vote of tabling by the PM and the possible re-tabling of the budget, the voting to elect a new Dewan Rakyat Speaker and two deputy speakers is also said to be on the card for this sitting as it was previously reported that incumbent Dewan Rakyat Speaker Tan Sri Azhar Azizan Harun will officially step down from his post on Dec 18 in line with the Federal Constitution, paving the way for a new Speaker to preside the first session of the 15th Parliament. 

For this, Jeniri stated that whoever is nominated should be professional and capable of handling Parliamentary business professionally, regardless of where they come from. 

Currently, it is unknown who will the Unity Government and Opposition nominated as Dewan Rakyat Speaker candidates. Whereas for the vacant deputy speakers’ position, it was rumoured that Masjid Tanah MP Datuk Mas Ermieyati Samsudin of PN, Lanang MP Alice Lau of PH and Cameron Highlands MP Datuk Ramli Mohd Nor of BN are among those considered for the position. 

  • This article first appeared in The Malaysian Reserve weekly print edition