Refer to PH manifesto for answers
AFTER the recent Pakatan Harapan (PH) presidential council meeting, Prime Minister and chairman of PH, Tun Dr Mahathir Mohamad, highlighted that PH’s financial situation is at a critical level and needs funds to stay afloat.
This is an important issue in the context of Malaysia Baru, as it is closely linked to the reform on political financing.
For many years, Umno and Barisan Nasional resorted to patronage, money politics, and rent-seeking to sustain their political activities and survival.
This is best explained by the seminal work of Professor Edmund Terence Gomez and Professor K.S. Jomo titled 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. Dr 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:
parties that qualify will receive annual funding from the government according to a formula that is transparent and consistent;
political contributions must be from sources that can be identified;
parties must submit audited financial reports every year;
parties cannot have assets in excess of RM1 billion; and, are not allowed to make political contributions.
In essence, there are three main components to the above pledge. First, political funding and expenditure must be more transparent to allow for public scrutiny.
Second, 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.
Third, the most important and progressive, is the introduction of a new system of public financing for political parties, which was also mentioned by Dr Mahathir in his press conference.
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 receive public funding must adhere to strict reporting procedures, provided by law, to avoid funds being misused or misappropriated.
There are definitely counterarguments to this approach as well — such as increased burden of government and taxpayers to “fund democracy” as opposed to pressing economic needs.
In the long run, however, public financing for political parties will ensure a fairer playing field, reduce the burden of political parties to fund-raise, and reduce political corruption.
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 the former ruling coalition.