2027 budget: the key highlights

The 2027 federal budget in Malaysia is the largest ever, with a total expenditure of RM460 billion, marking a 9% increase from the 2026 estimates. Prime Minister Anwar Ibrahim unveiled the budget, emphasizing the rising cost of living as a top priority. The budget allocates RM376.8 billion for operating expenses and RM83 billion for development expenditure.

Key highlights include a special financial assistance of RM1,500 for 1.3 million civil servants and pensioners, a RM750 increase in the minimum monthly pension for nearly 59,000 retirees, and a RM100 monthly SARA assistance for Malaysians aged 18 and above.

The education sector receives the largest allocation at RM69 billion, with additional funding for school repairs, upgrades to 682 dilapidated schools, and specific allocations for Chinese and Tamil national-type schools. Health receives nearly RM48 billion, while defence and home ministries each get RM22 billion.

The budget includes a RM2,000 minimum wage from June, benefiting more than four million workers. Micro, small, and medium enterprises with annual sales below RM50 million will be exempted from the wage increase. Income tax cuts and relief measures include a higher tax relief limit, reduced tax rates for specific income brackets, and exemptions for postnatal care and caregiving expenses.

E-commerce regulations are a focus, with an e-commerce bill aiming to strengthen accountability and curb unfair competition. Transport benefits include a MyKomuter50 pass expected to save KTM Komuter users up to RM160 a month, and free travel passes for school pupils and persons with disabilities. The FlySiswa Madani flight ticket subsidy is increased to RM500 for over 60,000 students.