Budget 2027 must balance cost pressures with fiscal resilience

Budget 2027 must strike a balance between addressing cost pressures and ensuring fiscal resilience, according to the Institute for Democracy and Economic Affairs (IDEAS). The think tank urged the Malaysian government to broaden its revenue sources, curb volatile fuel subsidies, and increase investment in productive development spending.

IDEAS emphasized the need for a comprehensive tax reform strategy and called for greater accountability in public-linked investments. The think tank also recommended a more predictable approach to fuel subsidies, linking subsidised fuel prices and quotas to global oil prices. Additionally, IDEAS proposed expanding targeted assistance programs like Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) to support households most affected by higher fuel prices.

To prepare for future crises, Budget 2027 should include a credible roadmap for comprehensive tax reform and clearly distinguish between conventional federal expenditure and investments by government-linked entities. The think tank stressed the importance of transparency in budget documentation, including greater public access to information throughout the budget cycle.