Tan Sri Mohd Sidek Hassan

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At Your ServiceOutcome-basedbudgetingTan Sri Dr. Wan Abdul Aziz Wan AbdullahSecretary General of Treasury, Ministry of Finance3 August 200952
Tan Sri Dr. Wan Abdul Aziz Wan Abdullahwell-formulated budget will ensure optimal allocation to meetA policy Targets In the public sector, budgeting is the key instrument torealise national policy objectives. As such, a well-formulated budget willensure optimal allocation of scarce resources to meet policy targets.The annual budgets, therefore, are the building blocks towards achieving theNational Mission and Vision 2020 of becoming a developed nation.In line with the Government’s emphasis on outcomes rather than output, we aremoving towards outcome-based budgeting (OBB) to ensure effective and efficientspending. This will ensure maximum benefit to the rakyat as well as fulfil theirrising expectations.For instance, the focus on output willgenerally be on the number of graduatesproduced by universities or traininginstitutes.However, in the more holistic outcomebasedapproach, the emphasis is on qualityand employability of the graduates, andultimately, their contribution to nationbuilding. Similarly, it is not the number ofentrepreneurs trained that matters, butrather how successful they are in theirbusiness ventures.Budgeting in the public sector has evolvedover the years. After Independence, westarted with line-item budgeting thatfocused on expenditure.Under this approach, ministries and agencieswere assessed on their ability to spend theapproved allocation within a given year.Similarly, it is not thenumber of entrepreneurstrained that matters, butrather how successfulthey are in their businessventures. Budgeting inthe public sector hasevolved over the years.After Independence, westarted with line-itembudgeting that focused onexpenditure.Moreover, it lacked coordinated planning, performance measurements andsystematic evaluation.Subsequently, a more results oriented Programme Performance Budgeting Systemwas adopted in 1969, where the focus shifted to outputs, with resources allocatedfor specific programmes and activities based on priorities.53
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Tan Sri Mohd Sidek Hassan

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