Understanding BERSAMA’s shadow budget 2027 – Belanjawan Bayangan Kancil 2027

BERSAMA, a Malaysian political party, has unveiled its Shadow Budget 2027 in an attempt to provide a comprehensive economic framework for the next decade. Authored by former Economy Minister Datuk Seri Rafizi Ramli and economist Sum Dek Joe, the document outlines a ten-year path towards a balanced budget, with the ultimate goal of achieving a surplus by 2035.

The party deviates from traditional firefighting budget strategies and instead focuses on delivering social benefits through a Generational New Deal. This approach combines tax reform with direct, institutionalized social security and labor market restructuring. BERSAMA anticipates a GDP growth of 5.2% for 2026, which, if realized, will help maintain a fiscal deficit and federal debt of 3.5% of GDP each.

Key economic challenges, such as foreign-driven exports driving GDP while widening the gap with Real Gross National Income (GNI), wage compression, and income stagnation, are acknowledged. The party also highlights that although labor productivity has grown 9% between 2019 and 2025, real wages per employee have fallen by 1.7%, and the Compensation of Employees (CE) accounts for only 33.9%-34% of GDP.

To enhance government revenue, BERSAMA proposes reintroducing the Goods & Services Tax (GST) at 5%, which would generate RM76.1 billion (3.3% of GDP) compared to the current RM59.4 billion under expanded Sales and Service Tax (SST). They also advocate for a new tax called the Retail Electronic Payment Tax (REPT), set to be implemented in 2030 at a rate of 0.5%, projecting an annual increase of RM9.1 billion.

Other policy recommendations include capping GST at 5% for ten years, reforming tax spending, and transitioning fuel subsidies to institutional social safety nets. A new Ministry of Social Security will consolidate 189 fragmented social assistance programs across 26 federal agencies, while a Universal Child Allowance and Cost-of-Living Allowance will provide direct cash support to B40 households and benefit around 8.3 million children.