Budget 2027 a positive and inclusive budget

BUDGET 2027, presented by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim, is among the largest and most people-centric budgets in Malaysia’s history.

With a record allocation of RM510 billion, it underscores the government’s commitment to inclusive growth that benefits all Malaysians.

The budget delivers targeted support for workers, families, students, senior citizens, Persons with Disabilities (PwDs) and businesses while strengthening the nation’s economic foundations and enhancing future competitiveness without introducing new taxes or tax reforms. 

One of the most significant announcements is the increase in the national minimum wage from RM1,700 to RM2,000 per month beginning June 2027.

More than four million workers are expected to benefit from the move, particularly those in the retail, manufacturing, services and hospitality sectors.

The increase is a positive step towards improving living standards and ensuring workers receive a fairer share of the country’s economic progress. As inflation continues to affect household spending, higher wages will help many families manage daily expenses more comfortably.

A welcome measure is the increase in personal income tax relief from RM9,000 to RM12,000. Middle-income earners often face the challenge of rising expenses while receiving limited government assistance. The enhanced tax relief provides greater disposable income and supports domestic consumption, which remains an important driver of economic growth.

The government’s commitment to social protection is demonstrated through the RM16-billion allocation for the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) programmes.

These initiatives will continue to assist millions of Malaysians, including lower-income and selected middle-income households. The expanded assistance serves as an important safety net and helps families manage essential living expenses during uncertain economic conditions.

Education remains a major priority under Budget 2027. Increased schooling assistance, support for Form Six students (RM2,500) and continued investment in school facilities demonstrate a commitment to developing future talent and strengthening Malaysia’s human capital. Such investments are essential in preparing younger generations for an increasingly competitive and technology-driven economy.

Senior citizens and PwDs will benefit from the budget through continued welfare assistance, healthcare support and social inclusion programmes. These initiatives help improve quality of life, especially for vulnerable groups living on limited incomes. The government’s attention to these sectors reflects a broader effort to create a more inclusive and compassionate society where no one is left behind.

A particularly encouraging aspect of Budget 2027 is its focus on Sabah and Sarawak. Sabah has been allocated RM18.7 billion while Sarawak receives RM16.2 billion, making them among the largest development recipients in the country.

These allocations support infrastructure projects, rural development, healthcare facilities, schools, water supply, electricity services and transport connectivity.

Continued implementation of MA63 commitments also signals a stronger commitment to addressing long-standing development disparities between East Malaysia and Peninsular Malaysia.

Major projects such as the Pan Borneo Highway, Sarawak-Sabah Link Road, flood mitigation programmes and improvements to healthcare and utility infrastructure are expected to improve connectivity, economic opportunities and living standards. These investments are crucial in promoting balanced national development and ensuring that economic progress reaches communities throughout the nation.

Small and medium enterprises (SMEs), the backbone of Malaysia’s economy, receive significant support under Budget 2027.

Businesses with annual sales below RM50 million are exempted from the immediate implementation of the new RM2,000 minimum wage, giving them time to adjust without disrupting operations. This balanced approach safeguards jobs while supporting workers’ welfare. Continued investments in digitalisation, artificial intelligence and automation will also help SMEs improve productivity, strengthen competitiveness and drive long-term business growth

While Budget 2027 deserves praise for its focus on immediate relief and economic inclusion, several important issues require greater attention.

Healthcare affordability remains a growing concern. Malaysians continue to face rising medical expenses, increasing insurance premiums and overcrowded public healthcare facilities.

Although healthcare funding remains substantial, more comprehensive reforms are needed to improve capacity, reduce waiting times and ensure affordable access to quality healthcare.

Retirement security is another area that requires stronger policy intervention. Many Malaysians have not fully recovered their retirement savings following pandemic-related EPF withdrawals.

As Malaysia moves towards an ageing population, future budgets should focus more heavily on retirement adequacy, elderly welfare and long-term financial security.

SMEs may benefit from stronger financing support. While grants for technology adoption are valuable, many businesses continue to face cash-flow constraints and limited access to capital. Additional loan guarantees and business expansion programmes could further strengthen entrepreneurship and economic growth.

Environmental sustainability represents an area for improvement. Although the budget acknowledges food security and climate resilience, stronger investments in renewable energy, sustainable agriculture, green technology and climate adaptation measures would better prepare Malaysia for future environmental challenges.

Overall, Budget 2027 is a positive and inclusive budget that directly responds to the concerns of ordinary Malaysians. Its emphasis on higher wages, tax relief, cash assistance, education, support for senior citizens and PwDs, SME development and substantial allocations for Sabah and Sarawak deserve recognition.

However, long-term issues such as healthcare affordability, retirement security, housing accessibility, business financing and environmental sustainability require deeper reforms.

While Budget 2027 provides meaningful relief today, Malaysia’s long-term prosperity will ultimately depend on how effectively future policies address these structural challenges and prepare the nation for the decades ahead.

The views expressed here are those of the writer and do not necessarily represent the views of Sarawak Tribune. The writer can be reached at [email protected].