Better-paying jobs, stronger productivity and purchasing power crucial to improving living standards: Economists
PETALING JAYA: Budget 2027’s focus on easing household expenses and improving access to healthcare and education reflects the government’s efforts to address Malaysians’ immediate needs.
Economists said lasting gains would depend on better-paying jobs, higher productivity and stronger purchasing power.
Universiti Teknologi Mara economist Dr Mohamad Idham Md Razak said cash assistance and cost-of-living measures should not automatically be labelled an election budget, as they addressed genuine pressures on households.
“Any budget must respond to the needs of the population, regardless of the political calendar.
“However, the government should also ensure that short-term assistance does not overshadow structural reforms needed to improve wages, productivity and economic opportunities over the longer term.”
Idham said the Budget’s success should be measured not merely by the amount allocated, but by whether it led to better jobs, higher real incomes and stronger productivity.
While targeted assistance could help households meet immediate expenses, cash aid alone could not resolve deeper problems, including high transport costs, mismatches between workers’ skills and industry needs, and limited access to affordable housing.
“Sustainable wage growth must be supported by higher productivity and the creation of higher-value employment, as workers could continue to face financial pressure if income growth lagged behind the cost of essential goods and services.”
He called on the government to strengthen industry-led skills development, encourage businesses to adopt technology and automation, and attract investment that created skilled, better-paying jobs.
He said improving access to affordable housing, public transport, childcare and healthcare would also ease the financial burden on working households.
“The ultimate measure of progress is whether workers experience a sustained improvement in real purchasing power, rather than simply receiving higher nominal wages,” he said.
Idham also called for regular assessments of the costs and effectiveness of major programmes, with changes made when they failed to deliver the expected results.
“Ultimately, public confidence comes from demonstrating that every ringgit spent delivers tangible improvements to people’s lives while maintaining the country’s fiscal sustainability.”
Putra Business School associate professor Dr Ida Md Yasin said Budget 2027’s continued focus on healthcare and education, alongside measures to cushion rising living costs, was among its key strengths.
She said access to basic necessities, including food, housing and clothing, remained essential, along with affordable healthcare and education.
However, she said assistance might not fully offset rising prices, particularly as salary increases had generally failed to keep pace with inflation.
Beyond minimum wage adjustments and short-term financial assistance, lasting improvements in living standards required coordinated efforts by the government, individuals and businesses.
Ida said the government should better align graduates’ qualifications and skills with available jobs so Malaysians could find work suited to their abilities.
“Individuals, meanwhile, should take responsibility for improving their skills and financial management rather than relying solely on government assistance,” she said.
Businesses, particularly small and medium enterprises, should improve productivity and efficiency through technology, better processes and a shift towards less labour-intensive operations, she said.
“While rising fuel costs and their knock-on effects on food prices were difficult to control due to external pressures, wage growth needed to keep pace with inflation to prevent further erosion of household incomes.”
Ida said stronger productivity and better job opportunities were essential to ensuring economic growth led to improved living standards and sustained household purchasing power.
