Govt to use zero-based budgeting system

KUALA LUMPUR: The government is set to implement a ZeroBased Budgeting (ZBB) system as part of its procurement process in the pursuit of good governance practice.

Finance Ministry special officer Tony Pua said the system initiated by the ministry was expected to be implemented this year and would start from zero.

“This is a budgeting system where ministries and government agencies start from scratch. You think about what you want to do for next year and write down the budget. This is breaking away from the old habit to avoid wastage,” he said at the launch of the Policy Paper on Public Procurement here yesterday.

He said the current budgeting system implemented by the previous Barisan Nasional government created inflation.

He said even though it would be challenging to implement the ZBB, the ministry would go ahead with it.

“Through the system, the previous government’s copy-andpaste method won’t work. If we don’t break away from the old habit of overbuying and overspending, it will be a problem.”

The ZBB is a method of budgeting in which all expenses by ministries and government agencies must be justified for each new period of tenders and every function within the government is analysed for its needs and costs, where a budget is set for what is needed for the upcoming year.

The Policy Paper on Public Procurement launched by The Centre to Combat Corruption and Cronyism stated that the government spent RM150 billion in procuring goods, works and services every year.

“This is equivalent to almost one-fifth of Malaysia’s nominal gross domestic product,” it said.

The report suggested the Finance Ministry follow its rules and regulations for the open tender system.

It also suggested that the Federal Government set up a portal to provide information on public procurement.