Tan Sri Mohd Sidek Hassan

At Your ServiceSystemic problems, however, continued to persist. There was lack of accountability,while decision making was highly centralised. To address these problems, theProgramme Performance Budgeting System was improved and introduced as theModified Budgeting System in 1990.The system expounded the concept of “let managers manage” and held themaccountable for their performance.However, even under this system, the emphasis was still on output, with eachministry and agency focusing on delivering its programmes and projects.This gave rise to duplication of efforts and resources across ministries. It soonbecame apparent that there were weak linkages between policy formulation,budgeting process as well as project implementation and evaluation. There wasalso little or no integration between operating and development budget. Moreimportantly, the system could not meet the dynamics of a rapidly changing economicenvironment.For example, although tourism is under the purview of Ministry of Tourism, thepromotion of tourism activities cuts across a number of ministries, including Health,Education, Transport as well as International Trade and Industry.Thus, policies and resource allocation would have to be better coordinated toachieve broad macroeconomic goals.There is even greater urgency now to adopta budgeting system that better reflectscosts and linkages with emphasis on sharedoutcomes, in line with the objective ofbecoming a competitive and high incomenation.Hence, the OBB will be introduced to integrate both development and operatingexpenditure towards achieving efficient allocation of resources and effectiveimplementation of programmes. This paves the way to link budget allocations withprogramme outcomes in an integrated manner.54