Anwar warns ministries against blank cheque approach while Malaysia grapples with subsidy burden

PUTRAJAYA, Sept 8 — Prime Minister Datuk Seri Anwar Ibrahim cautioned against the dangers of an endless expansion of public spending, cautioning that the government cannot indefinitely increase allocations while grappling with the escalating costs of subsidies. Addressing the Plantation and Commodities Ministry's monthly assembly, Anwar advocated for stronger fiscal discipline, asserting that the government must refrain from responding to every issue by merely raising funds.

"There must be greater discipline in managing public expenditure. We cannot simply address every problem by expanding allocations, given the high expense of subsidies," Anwar stated. "We have already disbursed RM40 billion in subsidies, which is a substantial figure." The Prime Minister emphasized that rising expenditure should be paired with tangible results, questioning the sustainability of the current spending pattern.

"If we persist in increasing spending, how long can we sustain this?" Anwar highlighted that the government's primary duty is to ensure that public spending yields meaningful benefits for citizens, rather than merely augmenting budget allocations year after year. His comments arrive as some ministries request increased funding at a time when the government is under pressure from the substantial fiscal strain of direct subsidies.

On August 30, Anwar disclosed that subsidies for petrol and diesel, benefiting a broad range of income groups, including M40 and T20, cost the government around RM40 billion. Despite this financial strain, the government continues to balance austerity with social welfare. Last month, Anwar announced the reinstatement of the basic entitlement for the Budi Madani RON95 programme, raising the cap from 200 to 300 litres per month to aid over 16 million users.

Today, Anwar acknowledged that many Malaysians continue to struggle with the rising cost of living, admitting that the government does not presume all issues have been resolved. He acknowledged that six immediate measures were introduced last month, but further actions are required to alleviate household pressures. These considerations are anticipated to be crucial in the crafting of Budget 2027, as the administration weighs the need for targeted assistance against the necessity of maintaining a stable fiscal position.