Keep subsidies for consumers in Budget 2027, says ministry

The Domestic Trade and Cost of Living Ministry in Malaysia is advocating for the preservation of subsidy allocations in the 2027 Budget, despite the financial strain caused by escalating fuel subsidies. Minister Datuk Armizan Mohd Ali emphasized that these allocations are crucial for the ministry to perform its duties efficiently, especially concerning the stability of goods' supply and prices.

The ministry is keen on maintaining subsidies for items like diesel, cooking oil, and the Price Standardisation Programme in Sabah and Sarawak. Armizan highlighted the significant surge in fiscal space required for fuel subsidies, from RM15 billion in 2026 to almost RM40 billion in 2027, a threefold increase. This fiscal challenge underscores the need to balance subsidy delivery with the country's financial capacity.

The ministry, he said, has already submitted its proposals to the Finance Ministry for the 2027 Budget, keeping in mind the current needs and fiscal constraints. The government's subsidy reforms have ensured that eligible groups continue to receive subsidies despite the rising costs, thanks to mechanisms like SKDS and Budi Diesel.

The ministry remains committed to working collaboratively with the Finance Ministry and other relevant departments to ensure the optimal use of subsidies, which would ultimately benefit the populace. Additionally, Armizan noted that the cost of living is a multifaceted issue that transcends individual ministries and will be discussed at the National Cost of Living Action Council meeting chaired by Prime Minister Anwar Ibrahim on September 29.

The eight councils would provide a platform for ministries to propose innovative strategies or enhancements to existing measures aimed at tackling cost-of-living difficulties.