Fiscal discipline can't be strict for some ministries and flexible for others

 

 A week after the dispute over payments to rural contractors surfaced, Ahmad Zahid Hamidi has insisted that the Rural and Regional Development Ministry does not spend beyond allocations approved by the government.

Government ministries cannot simply spend public money without approval. But that does not answer the issue raised by the Finance Ministry over the gap between the Rural and Regional Development Ministry’s annual rural road allocations and actual expenditure.

In 2023, RM1.1 billion was allocated for rural road projects, while actual expenditure reached RM1.8 billion. In 2024, RM1.3 billion was allocated, and RM2 billion was spent. In 2025, RM1.6 billion was approved, compared with RM2.3 billion spent. For 2026, Parliament approved RM2.1 billion, and by June around RM1.9 billion had already been spent.

More than 90 percent of the annual allocation was therefore used in the first six months. The Finance Ministry also stated that there had been no restriction on the Rural and Regional Development Ministry’s rural road allocation and that the approved funds had been fully channelled.

This does not mean that the ministry spent money illegally. Supplementary approvals, previously approved commitments and projects carried forward from earlier years can result in actual expenditure exceeding the amount originally allocated for a particular year.

The Rural and Regional Development Ministry has also pointed to older contractual commitments, including projects delayed during the Covid-19 period. Those projects still have to be completed, and contractors who have carried out legitimate work still have to be paid.

But the figures cover three consecutive years. If these commitments were already known and approved, why did the gap between the original annual rural road allocation and eventual expenditure continue in 2023, 2024 and 2025? By June 2026, almost the entire allocation for the year had already been used.

Covid-era delays may explain part of the outstanding commitments, but after several years, they cannot by themselves explain the entire pattern without a proper breakdown.

Explanation needed

Zahid is the minister responsible for the Rural and Regional Development Ministry. He should explain how much of the additional expenditure came from old contractual obligations, how much involved newer commitments, when those commitments were approved and why the ministry’s rural road programme repeatedly required substantially more than the amount originally allocated for the year. The public should also know what has been changed to prevent the same pattern from continuing.

Parliament approves annual budgets to determine how much the government can spend and where that money should go. A ministry may have many necessary projects, but available resources are limited. When expenditure on one programme repeatedly exceeds the original annual allocation by hundreds of millions of ringgit, an explanation is required.

The Finance Ministry says it has approved an additional RM300 million for 2026 to help settle outstanding contractor payments. The Rural and Regional Development Ministry disputes that description and says the amount relates to existing commitments that should be channelled through the proper spending authority.

Whichever description is used, the central issue remains the same. More funding is required to meet obligations that were not fully covered by the original annual rural-road allocation.

The Finance Ministry has also said that savings are being identified from other ministries to accommodate the Rural and Regional Development Ministry’s excess commitments. The problem therefore does not remain within the Rural and Regional Development Ministry alone. Financial space has to be found elsewhere in government.

There is no evidence that health, education or any particular programme will be cut, so such claims should not be made without proof. But if savings are being found from other ministries, taxpayers should be told where they come from. If expenditure elsewhere has to be postponed, reduced or rearranged to make room for the ministry’s commitments, that information should be made public.

Contractors should be paid for legitimate work that has been completed and certified. They have workers, suppliers, loans and cash-flow commitments of their own. Rural communities also need roads and infrastructure. None of that removes the need to examine how the ministry reached a position where its original rural road allocation was repeatedly insufficient to meet its commitments.

Ministries’ responsibilities

Zahid’s defence that his ministry does not spend beyond government-approved allocations addresses whether the expenditure ultimately received approval. It does not explain why the ministry repeatedly needed substantially more than the amount originally allocated for rural-road projects.

In 2023, the gap between the original allocation and actual expenditure was about RM700 million. In 2024, it was again about RM700 million. In 2025, the difference was about RM700 million once more. By the middle of 2026, RM1.9 billion of the RM2.1 billion allocation had already been used.

A pattern like this requires more than an assurance that the expenditure was approved. It requires an explanation of how the commitments were planned.

Zahid is also deputy prime minister and Umno president. His political position should not change the standard applied to his ministry. Fiscal discipline cannot be strict for some ministries and flexible for others. If another minister faced the same pattern for several consecutive years, the same questions should be asked.

The Finance Ministry has responsibilities too. If these were known contractual commitments and the Finance Ministry had been aware of them for years, it should explain why annual rural-road allocations continued to fall significantly below the amounts eventually required.

If the government approved the projects and knew the bills would eventually arrive, the mismatch cannot simply be treated as the Rural and Regional Development Ministry’s problem.

Governing finances

But Zahid cannot avoid responsibility by pointing only to the approval process. A minister is responsible not only for securing projects and making sure contractors are paid. He is also responsible for his ministry's financial management and planning.

The RM300 million may help settle part of the current backlog. It does not resolve the underlying issue. Without changes to the way projects and contractual commitments are matched against available allocations, the same situation can return. Projects proceed, expenditure increases, allocations become insufficient, contractors wait, and additional funding is sought later.

That should not become the normal way government finances are managed.

Supplementary funding itself is not unusual. Governments sometimes need to adjust allocations because circumstances change. The problem is when the same programme repeatedly requires significantly more than originally allocated and the pattern continues without a convincing explanation.

Rural development should not be stopped. Contractors should not be denied payment for work they have completed. But those arguments cannot close questions about financial management.

If old Covid-era projects account for most of the difference, the Rural and Regional Development Ministry should publish the figures. If newer commitments contributed substantially, explain when and why they were made. If the original rural road allocations were unrealistic from the beginning, explain why the same mismatch was allowed to continue for several years.

Government money belongs to the public. Parliament approves how it is spent. When one ministry’s rural-road programme repeatedly requires hundreds of millions of ringgit beyond its original annual allocation, the minister responsible must account for it.

After three consecutive years of the same pattern, Zahid’s answer cannot simply be that the spending was approved.

He needs to explain why his ministry’s rural road commitments keep requiring more than was originally allocated. - Mkini

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MAHATHIR MOHD RAIS is a former Federal Territories Bersatu and Perikatan Nasional secretary. He is now a PKR member.

The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.