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SHAH ALAM – Budget 2027 appears to be aimed at securing public support ahead of the next general election, with targeted assistance for lower-income groups, youths and civil servants, says political analyst James Chin.
Chin said the government had increased funding for the Department of Islamic Development Malaysia (Jakim) to RM3.1 billion, raising questions about whether the allocation was intended to strengthen support among Muslim voters.
“It’s obvious that he’s trying to capture the Muslim vote, but we all know that money spent on Jakim is usually not economically productive,” he told Sinar Daily.
Budget 2027 totals RM459.8 billion, up from the original RM419.2 billion allocation for Budget 2026.
However, Chin said the annual increase in government spending should be viewed in context, as actual expenditure often differs from the initial budget allocation.
“The Malaysian government has never, ever followed the actual budget. That’s the reason why they have a mid-term review and they pass a supplementary budget,” he said.
He expected actual government spending to be between RM480 billion and RM500 billion by the end of the 2027 financial year.
Chin described the budget as an election-oriented one but noted that the government had avoided introducing flashy projects, instead spreading assistance across different groups, particularly lower-income households.
“For the young people, he has made sure that those with study loans who are starting jobs and earning less than RM2,500 do not have to pay their PTPTN [National Higher Education Fund Corporation] loans,” he said.
He also pointed to increased individual tax relief of up to RM12,000 and the planned increase in the minimum wage to RM2,000 as measures that could benefit younger Malaysians.
Civil servants and pensioners are another important group, with Chin noting that the government had allocated cash assistance of RM1,500 for civil servants and RM750 for pensioners.
On taxation, Chin said the government had avoided bringing back the Goods and Services Tax (GST), which he believed would have been politically difficult ahead of the next general election.
He also noted the absence of a new carbon tax, suggesting the government was reluctant to introduce measures that could increase costs for businesses and consumers.
Education, he said, remained another major area of government spending, although he questioned whether the allocations were translating into better outcomes.
While the Education Ministry received about RM69 billion, he said total education spending was closer to RM90 billion when the Higher Education Ministry’s allocation was included.
“If you look at the Programme for International Student Assessment (PISA) scores and all the other measurements, education is actually going backwards. Though you keep spending more and more money on education, you’re not getting value for money,” he said.
Despite the concerns, Chin expected a largely neutral reaction from financial markets, saying the budget was unlikely to generate either strong enthusiasm or significant disappointment.
He also welcomed the decision to allow expatriates’ spouses to work in Malaysia, describing it as a positive move given that many were highly qualified.
“Many expatriates in Malaysia have highly qualified wives, so allowing them to work is a really good idea,” he said.
On the projected fiscal deficit of 3.3 per cent, Chin said it should not be viewed as a major concern when compared with deficit levels in other countries.
“Most countries’ deficits can go up to five per cent, so Malaysia is actually on the lower side,” he said.