Malaysia Unveils RM510 Billion Budget 2027 With Higher Cash Aid and Wages

Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim tabled Budget 2027 in the Dewan Rakyat on Friday, October 9, allocating a total of RM510 billion, up from RM470 billion in the previous year. The budget, themed "Reaching for the Skies, Anchored on Our Values," is the fifth under the Unity Government and the second under the 13th Malaysia Plan.

Operating expenditure accounts for RM376.8 billion, while development expenditure receives RM83 billion. The government earmarked over RM80 billion for subsidies, aid, and incentives, including RM40 billion for fuel subsidies and RM3.3 billion for the Social Welfare Department.

“The budget is not merely a financial statement but a moral statement and a National Promise to the people.”

Cash assistance under the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) schemes will rise to RM16 billion from RM15 billion, benefiting up to nine million recipients. STR recipients will receive SARA of up to RM150 monthly, while other adults aged 18 and above will get RM100 twice in 2027.

The minimum wage will increase from RM1,700 to RM2,000 monthly effective June 2027, covering over four million workers. Micro, small, and medium enterprises with revenue below RM50 million are exempted to allow adjustment time.

Individual income tax relief rises from RM9,000 to RM12,000, with tax rates lowered by one percentage point for selected brackets. The Education Ministry receives the highest allocation at RM69 billion, followed by the Health Ministry at RM47.7 billion, which includes permanent posts for 9,000 contract doctors.

Sabah and Sarawak will receive RM18.7 billion and RM16.2 billion respectively, plus RM3.3 billion for highway projects. A RM160 million package with Grab will support e-hailing and p-hailing workers, including EPF matching contributions up to RM600 annually.

Economists remain divided on the budget's political impact, with some noting the broad beneficiary reach but a lack of a standout "wow factor" to shift public sentiment significantly before the next general election due by early 2028.