Anwar says reduced waste and leakages created room for more Budget 2027 aid

Malaysian Prime Minister Anwar Ibrahim presented his fifth budget in Johor Bahru on October 9, 2023, with the aim of translating economic gains and previous reforms into tangible benefits for ordinary Malaysians. Anwar, who serves as finance minister, emphasized that the budget would return the fruits of growth and savings achieved through reforms to the people.

The 2027 budget focuses on easing cost-of-living pressures, raising disposable incomes, and investing in industries that will propel Malaysia further up the economic value chain.

Economists have differing opinions on whether the budget will garner a political dividend for Anwar. While some appreciate the broad range of beneficiaries, others argue that it lacks a standout "wow factor" and may not significantly impact public sentiment ahead of the 2028 general election. Sedek Jantan of IPP believes that Anwar can only translate the budget into political capital if its measures produce measurable and lasting improvements for households.

Voters will ultimately judge the government's agenda based on whether they can feel economic benefits in their daily lives.

The budget includes a wide range of measures to alleviate cost-of-living pressures, such as additional cash assistance for lower-income households, tax cuts for middle-income taxpayers, and support for civil servants, pensioners, students, gig workers, farmers, fishermen, and small businesses. The government's STR and SARA financial assistance programs are set to see increased allocations, with up to nine million STR recipients eligible for as much as RM150 a month in SARA assistance.

The minimum wage will also rise from RM1,700 to RM2,000 a month from June, benefiting workers across the board.

However, some economists argue that the budget falls short of expectations, given the prospect of an early general election. Geoffrey Williams of Williams Business Consultancy describes the announcements as "rather lacklustre" and suggests that Anwar missed an opportunity to gain voter support. He points out that some headline measures, like the minimum wage increase, were expected, and the budget's impact on individual households may not be substantial.

Williams believes that Anwar could have written off student-loan repayments or introduced a universal basic pension to make a more decisive pitch to voters.