2027 Budget tour must turn public feedback into policy, economists warn

The Malaysian government's nationwide tour ahead of the 2027 Budget aims to transform fiscal policy from a top-down to a more bottom-up approach, according to economists. Universiti Kuala Lumpur Business School analyst Aimi Zulhazmi Abdul Rashid highlighted that engaging businesses, NGOs, and the public could provide policymakers with valuable insights into challenges that may not be evident through macroeconomic data.

This bottom-up approach could help the government avoid unintended consequences when implementing policies such as targeted subsidies, as people are more likely to comply when they have contributed to the policy's development. Finance Minister II Datuk Seri Amir Hamzah Azizan stated that feedback from focus groups and stakeholder meetings would be studied for potential inclusion in the budget.

However, it is crucial that the feedback is not merely a listening exercise and that published suggestions are incorporated into the 2027 Budget. Both economists emphasized that while the government has fiscal space for new measures, constraints such as fiscal consolidation, debt-servicing costs, and revenue uncertainty due to high oil prices and ringgit volatility will continue to limit spending.

They advocated for reprioritising resources rather than making large new spending commitments, focusing on quality of spending that delivers measurable economic value. The economists also suggested that the budget should address emerging growth areas, such as the Low Altitude Economy, by investing in talent, research and development, testing facilities, digital infrastructure, and a clear regulatory framework.