Kota Kinabalu: The real test of Budget 2027 is whether its allocations will improve the operating environment for businesses in Sabah, said Federation of Sabah Industries (FSI) president Natalie Fung.
She noted that Sabah’s Federal allocation had increased to RM18.7 billion, with continued investment in road connectivity and electricity infrastructure.
“This allows the State to strengthen its economic foundations, but the benefits must reach businesses and improve living standards,” she said in a statement.
Fung said Sabah companies continued to face operating cost pressures involving logistics, utilities, labour and regulatory compliance, alongside a lack of adequate support infrastructure.
“The minimum wage will rise to RM2,000 from June 2027, which is meant to improve workers’ incomes,” she said.
However, she noted that the impact on smaller firms would vary depending on their profit margins, productivity and ability to pass on additional costs.
Fung said FSI urged the Government to complement wage increases with productivity programmes, automation support, skills upgrading, accessible financing for viable small and medium enterprises (SMEs) and other incentives.
On infrastructure, she said better roads, reliable electricity, adequate water supply and efficient port and cargo facilities were essential to lowering business costs and attracting sustainable investment.
She also called for timely project implementation and transparent monitoring.
“FSI also wants local manufacturers and suppliers to be given wider opportunities to take part in government projects and major investments,” she said.
Fung said Sabah must not only attract investment but also ensure local businesses were prioritised and equipped to participate in supply chains, benefit from technology transfer and contribute to job creation.
She said FSI was calling for practical support for industry-led technical and vocational education and training (TVET), digitalisation and artificial intelligence adoption, tailored to business needs.
“Smaller enterprises need accessible training, technical assistance and co-funding to raise productivity and prepare their workforce,” she said, adding that the Government should continue consulting Sabah’s business community.
Fung proposed that Budget 2027 be assessed based on funds disbursed, projects completed, private investment generated, local businesses supported and quality jobs created, as well as the lasting commercial and intangible benefits.
“FSI is committed to working with the Federal and Sabah governments to build a more competitive, resilient and diversified industrial economy.
“Sabah needs not only a fair share of national development spending but also an enabling business environment that allows Sabah-based enterprises to grow, invest, innovate and create sustainable prosperity for Sabahans,” she said.
