Government under pressure to deliver political financing bill as reform voices grow louder

KUALA LUMPUR: As Parliament reconvenes amid intensifying scrutiny over institutional reforms, the spotlight is once again on the long-promised Political Financing Bill.

Deputy Minister in the Prime Minister’s Department (Law and Institutional Reform) M. Kulasegaran outlined progress on Monday, emphasising ongoing stakeholder engagements and policy refinement. However, civil society groups have urged clearer timelines and greater transparency for what remains a linchpin of Malaysia’s anti-corruption agenda.

The proposed Bill seeks to end perceptions that political donations translate into government contracts or preferential treatment, an issue that has long dogged Malaysian politics.

Kulasegaran told the Dewan Rakyat that recent consultations, spanning 20 engagement sessions with political actors, non-governmental organisations, business chambers, academia and civil society, are shaping key components of the draft law.

Proposals include mandatory public disclosure of political parties’ financial reports, public funding mechanisms, donation caps and restrictions on donor eligibility. A public perception study led by the International Islamic University Malaysia is expected to conclude in late February.

Yet for reform advocates, progress without democratic certainty is insufficient.

Faisal Abdul Aziz, chairman of the Coalition for Clean and Fair Elections (Bersih), called on the government to set a clear timeline for the study and consultation process, including when the Bill will be tabled in Parliament, to reassure the public and demonstrate political will.

“The public should be able to follow developments and gauge genuine commitment to tackling political corruption,” he told Twentytwo13.

He stressed that parliamentary committees and civil society organisations must be involved as checks and balances to ensure the Bill is fair, non-partisan and capable of fostering clean politics over the long term.

“Referring to the debates in Parliament and discussions among political leaders, including the Umno Women’s wing at the recent Umno general assembly, it is evident that this Bill has the support of all political leaders. As such, the public expects this support to be translated into concrete backing in Parliament when the Bill is tabled,” he said.

Similarly urgent is the critique from Centre to Combat Corruption and Cronyism (C4) chief executive officer Pushpan Murugiah, who has characterised the absence of a Political Funding Act as a fundamental reform gap, describing political financing as “the mother of all corruption” in Malaysia.

He said that without legally binding rules on donation disclosure, spending limits, enforcement and oversight, the risk remains that political parties and actors could be unduly influenced by wealthy donors, entrenching patronage and weakening democratic competitiveness.

“With general elections looming and the influence of money politics intensifying ahead of electoral contests, a robust Political Funding Act is essential to dismantling entrenched networks that tie money, power and public decision-making together. Without the Act, Malaysia risks perpetuating cycles of corruption and cynicism,” he said.

Beyond the Bill itself, C4 highlighted institutional reforms that could strengthen governance structures, including proposals for the Prime Minister to relinquish the concurrent role of Finance Minister.

Pushpan said the previous concentration of these portfolios was a structural weakness that contributed to governance failures culminating in the 1MDB scandal. He added that separating the roles would send a stronger signal of anti-corruption resolve than more symbolic measures such as term limits alone.

He also called for greater clarity and transparency in the reform process, including the publication of White Papers to stimulate public debate and informed scrutiny, while welcoming the inclusion of academics and civil society in the drafting process.

These developments are unfolding against a backdrop of broader institutional reform efforts championed by Prime Minister Datuk Seri Anwar Ibrahim.

Earlier this month, Anwar renewed his pledge to push through long-promised reforms, including a proposed cap on the tenure of the Prime Minister at two terms or a maximum of 10 years, the separation of prosecutorial powers from political influence, and new laws on Freedom of Information and the establishment of an Ombudsman.

Analysts noted that parliamentary arithmetic, with the governing coalition holding a comfortable majority, should facilitate the passage of such reforms, provided there is political will to follow through.

However, critics argue that structural change has been slower than hoped. Recent controversies surrounding prosecutorial independence, judicial appointments and anti-corruption enforcement have fuelled public scepticism about the depth of reform.

The drive for a Political Financing Bill, in particular, has often been cited as a litmus test of Malaysia’s commitment to transparency and accountability.

No discussion of political financing reform in Malaysia can be divorced from the shadow of the 1Malaysia Development Berhad (1MDB) scandal and its fallout. The multi-billion-dollar scandal, which erupted more than a decade ago, exposed systemic weaknesses in oversight, governance and political finance that reverberated across the nation’s institutions.

Former prime minister Datuk Seri Najib Razak was convicted and sentenced in multiple cases related to the 1MDB scandal and associated offences involving the SRC International unit.

In December 2025, he was handed additional prison terms and heavy fines for abuse of power and money laundering linked to the misuse of state funds, verdicts that highlighted both the scale of corruption and the difficulty of securing accountability at the highest political levels.

Najib’s convictions, which extended his sentences well beyond his original term, underscored public anger over grand corruption and the need for systemic safeguards. The political financing debate was further reignited by reports that he had received funds into personal accounts during the height of the 1MDB saga.

Despite Najib’s imprisonment, entrenched patronage and opaque money flows persist. The Public Accounts Committee and civil society groups have repeatedly cited how the absence of clear political financing mechanisms enables backdoor influence, eroding trust in public institutions.

With the Political Financing Bill still under refinement, the government’s ability to articulate clear timelines and substantive frameworks will be critical in reassuring Malaysians that institutional reform is more than rhetoric.

As Bersih, C4 and legal experts continue their advocacy, the interplay between public expectations, political calculation and legislative action will shape not just the Bill’s prospects, but the broader trajectory of Malaysia’s democratic evolution.