Slash and Burn: A look at Anwar’s trimming of MP funds

This month, the government of Malaysia’s 10th prime minister Anwar Ibrahim announced that it would cut parliamentary constituency funds given to individual Members of Parliament by over 65% to RM1.3mil from RM3.8mil. Contrary to a widespread misperception, these funds are not the funds of individual MPs. Rather, they are development funds used to service a community and given to voters in a constituency.

These funds have served to strengthen local governance by supporting citizen engagement and providing alternative funds to meet the needs of communities where government agencies and policies have fallen short. They have supported schools, food distribution, and local infrastructure, and have been financial lifelines for many rural areas and marginalised communities.

The announcement was couched as an “austerity” measure that would reduce development spending by over RM400mil. Constituency funds were equalised to all MPs and increased to RM3.8mil in 2021 with the signing of the Memorandum of Understanding (MoU) between former prime minister Ismail Sabri Yaakob and the opposition, along with additional allocation to parliamentarians in Sabah in Sarawak.

The Anwar government’s new cuts, however, have yet to be fully explained. Yet, what is clear is that the cut announcement was made without consulting Pakatan Harapan (PH) and other coalition members. And based on certain remarks so far, the cuts may not be equally applied.

Also, those who may be most impacted by the slashing of funds are voters in areas held by backbencher MPs – those not chosen to be part of the Anwar loyalist, Deputy Prime Minister Ahmad Zahid Hamidi’s Umno and Gabungan Parti Sarawak (GPS) dominant government – and those in the opposition, particularly Perikatan Nasional (PN).

Constituency funds allocations are sadly being repoliticised. Comments regarding the allocation of constituency funds taunted the opposition to “behave“, a punishment tactic honed by governments of old (and now used by new).


Battle for Equal Distribution

Constituency funds have long been contested. Political elites have often framed constituency funds as their entitlement, with the executive using these funds as a political tool. The main gripe has involved inequality in distribution, as they have been used to punish voters in constituencies that voted for the opposition and as a means to strengthen those in government.

Those most impacted historically have traditionally been in urban centres and constituencies along the West Coast.

With Anwar, who is also finance minister, and his government’s announcement and the results of the 15th general election (GE15) late last year, the areas to be most impacted by this decision are rural communities, especially in the Malay heartland, that voted for PN (notably in Kelantan, Kedah and Terengganu), and urban, semi-urban and rural areas that voted for PH, Umno, GPS and other coalition partners of the “unity” government but were not chosen to be in the Anwar cabinet.

Ironically, many of those affected by this austerity move are the government’s own supporters in places such as Kuala Selangor, Ampang, Muar, Julau and Kota Belud.

The practice of punishing constituencies by favouring winners has always been flawed. Malaysia’s first-past-the-post system has advantaged those with the most votes, leaving out those who voted for alternatives. Even areas that included considerable support for the government of the day – but not enough to win the seat – have been affected by a pro-government-only distribution practice.

The malapportionment of constituencies — with the most populated constituency of Bangi in Selangor with over 300,000 voters in 2022 compared to Igan in Sarawak with less than 30,000 voters — has meant that allocations have systematically lacked equality.


Meeting Needs Imperfectly

Constituency allocations have had other shortcomings beyond equality. Perhaps the most troubling dimension is that this practice has reinforced patronage, and with it the view that the government’s (and MP’s) role is to seemingly dole out funds to those favoured and for organisations in communities to seek favour.

Filling a governance gap, constituency allocations have also reduced pressures to reform policies and improve civil service implementation. It has been easier to throw limited funds at a problem rather than address long-term systemic issues that made the problem arise in the first place. 

Yet at the same time, these funds have been and remain lifesaving.

Constituency allocations provide a flexible means to address community needs. These funds filled needs gaps in the allocation of development spending, dominated by “projects”, many regularly tied to cronies.

Constituency funds are distributed to local areas using local knowledge and local cooperation. This “people-centred” spending regularly (and quietly) improves lives and continues to be essential for poorer communities. This came to the fore during the Covid-19 pandemic.

At the height of the Covid crisis, all MPs received funds and funding was increased. One of the most important spending items was on food for distribution and food banks. The increase in constituency funds was accompanied by continued oversight over distribution with local government officers approving distributions.

Some MPs accounted publicly for their allocation initiatives in various “report cards”, building greater transparency into spending. Too many MPs, however, failed to engage in public accounting. Still, there was a marked improvement in accountability.


Harmful Punishment

The new government’s announced cuts will hurt some of the most Malaysians in need, while simultaneously regressing to a punishment practice of old Umno politics.

How the constituency cuts are being touted, so far, not only empowers the opposition by giving them a grievance to highlight, it also undermines parliamentarians supporting the Anwar government whose local standing is being undercut.

These cuts slash and burn. Austerity in spending eroded support for Dr Mahathir Mohamad’s PH 1.0 government and these significant local spending cuts pose similar risks as they have yet to be replaced by other measures.

Yes, the current government has promised to increase the development allocations once the country’s finances improve. But until then and instead of just slashing, the change in the constituency fund system provides an opportunity for needed reform.

Not only does this allow for the needed consideration of development and social protection policies, there are others areas to be reviewed. Foremost, is the need to move the jurisdiction of control on constituency funds from the executive to parliament.

These funds should not be used to strengthen one political coalition or another but distributed to all of those in the legislature. Second, the rationale for spending and allocating funds to one area over another should be based on shared good governance principles.

Equality and need (especially for rural and poorer areas) should be brought into the assessment of constituency spending, instead of the “punish” mentality that uses government spending to favour those in government. Here a serious assessment of areas being left behind, especially in Borneo, would be essential. Plus, all constituency fund spending should be made public.

If cuts are needed, they should not be done arbitrarily, unevenly and, importantly, without alternative measures and policies in place to address the social needs of communities at risk.

Instead, the risks that are being exacerbated are further hunger, the dilapidation of facilities and greater local resentment. The approach to constituency funds needs to be thought through more carefully; there is a need to reduce political polarisation and social divisions rather than exacerbate them.

If not handled fairly, with people rather than politics in mind, those most potentially hurt by the vacuum in local spending will be ordinary Malaysians.


First published on Between the Lines.