PETALING JAYA: Malaysia needs clear governance rules to stop future prime ministers and finance ministers from tapping government-linked companies and government-linked investment companies to top up national budgets, two former Umno leaders said.
Former Umno information chief Shahril Hamdan said successive administrations had taken advantage of the lack of clarity over the relationship between Putrajaya and GLCs, although the way they did so had differed.
“We are not saying that we are neoliberal and must keep the government and GLCs far apart. But what is the right balance? What is the governance structure?” he asked on the Keluar Sekejap podcast.
Former health minister Khairy Jamaluddin agreed that GLCs and GLICs should have a developmental role, but said clear governance rules and safeguards were needed.
“Otherwise, the temptation for future prime ministers and future finance ministers to dip into the second book is going to be quite high,” he said, referring to Wawasan vice-president Omar Mustapha Ong's description of the government having "two books".
According to Omar, the two books are the federal budget, and the companies and funds under government control, including Petronas, Khazanah Nasional Berhad, Tabung Haji, and the Employees Provident Fund.
Khairy said the practice of looking to GLCs and special purpose vehicles to meet government spending needs began under former prime minister Najib Razak, who worked with former Treasury secretary-general Irwan Serigar Abdullah.
He argued that the approach before Najib's administration, under former prime ministers Abdullah Ahmad Badawi and Dr Mahathir Mohamad, involved more conventional federal budgeting.
"GLC transformation happened during Pak Lah's (Abdullah) time, but there was no attempt at this development agenda, but it did not reach the stage where the finance minister, who is also the prime minister, had two books," he said.
Khairy said the government should scrutinise how it used these two sources of funding, noting that a falling federal budget deficit did not necessarily tell the whole story of the government’s financial commitments.
The 2027 budget includes several major investment commitments by GLCs and investment institutions.
The Retirement Fund Incorporated (KWAP) will invest RM750 million in student housing at six universities under the Vista Kampus project.
Separately, the EPF, the Armed Forces Fund Board, and Sime Darby Property have established a RM1.25 billion fund for data centres and industrial logistics assets in Elmina, Selangor.
Khazanah and KWAP will also invest RM1.2 billion to help local semiconductor companies move into higher-value segments.