Kuala Lumpur: Budget 2027, totalling RM459.8 billion, tabled by the Government Friday focuses on easing the cost-of-living pressures faced by the people while building a fairer and stronger future for generations to come.
Themed “Reaching for the Sky, Rooted in the Ground”, it outlines eight key pillars, ranging from a commitment to improving the people’s quality of life to an agenda to strengthen the nation’s resilience and future.
Tabling the Supply (Budget) Bill 2027 in the Dewan Rakyat, Prime Minister Datuk Seri Anwar Ibrahim (pic) summed up this commitment as a “National Covenant”, a promise that the nation’s progress must translate into a more dignified life for the people while strengthening Malaysia for generations to come.
One of the key announcements was an increase in the minimum wage from RM1,700 to RM2,000, effective June 2027.
“The question before us is not simply how large an economy we want to build, but whether that growth enables families to build up their savings, workers to earn more decent wages, small businesses to grow and thrive, and everyone to reach for the sky while remaining rooted on the ground.
“Therefore, it must be emphasised that a national budget is a moral statement or a National Covenant of a responsible government,” said the Finance Minister.
Budget 2027 is the fifth budget presented by Anwar’s Madani government and the second under the 13th Malaysia Plan (13MP). It serves as a key platform for implementing the country’s development agenda over the next five years.
Addressing cost-of-living pressures is the first key pillar, with the Government allocating more than RM80 billion for subsidies, assistance and incentives in 2027.
This includes fuel subsidies, which are expected to reach RM40 billion, and nearly RM3.3 billion in assistance through the Social Welfare Department.
Allocations for the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) have been increased to RM16 billion from RM15 billion. All STR recipients will receive Sara aid of up to RM150 a month, or RM1,800 a year, benefiting up to nine million STR recipients.
Malaysians aged 18 and above who are not STR recipients will receive a RM100 Sara Madani aid twice — before Aidilfitri and in conjunction with the 70th National Day. The initiative is expected to benefit 13 million Malaysians, including those in the M40 middle-income group.
In addition, the Prime Minister announced that the Madani Rahmah Sales and Madani Agro Sales programmes would be expanded, with the allocation increased to RM750 million from RM630 million. A total of 35,000 sales programmes are targeted nationwide.
Sara is now available at 15,000 participating outlets, including 6,800 small grocery shops and cooperatives, with the participation of small retailers set to be expanded next year.
Budget 2027 goes beyond direct assistance, with efforts to boost incomes also being stepped up through an increase in the minimum wage from RM1,700 to RM2,000 effective June 2027. A minimum starting salary of RM2,500 a month will also be set for semi-skilled jobs and graduates.
To ease the burden on the middle-income group (M40), Anwar said the Government had agreed to raise the tax relief limit from RM9,000 to RM12,000, alongside a one-percentage-point reduction in tax rates across several income bands.
The welfare of about 600,000 p-hailing workers will also be addressed through efforts to finalise minimum income rates, an income formula and social protection measures for gig workers in early 2027, alongside an expansion of matching contributions under the Social Security Organisation (Perkeso) and the Employees Provident Fund (EPF).
To strengthen social protection, the Prime Minister said every Malaysian would be automatically registered as an EPF member upon reaching the age of 18, enabling them to start saving for retirement earlier.
Anwar also said the allocation for the health sector had been increased to RM47.7 billion from RM46.5 billion, with more than 9,000 contract doctors to be offered permanent positions in 2027.
The Government will also double the monthly incentives for about 47,000 paramedics and nurses from RM100 to RM200, while increasing the air healthcare service incentive from RM30 to RM100.
To ensure more balanced regional development, the Government is adopting an equitable approach that takes into account the needs of each state based on its respective challenges and strengths, including addressing floods and water supply issues, developing industries and technology, transport, food security and tourism.
Development in Sabah and Sarawak will remain a priority, with record federal allocations of RM18.7 billion and RM16.2 billion respectively in 2027. The government will also continue to honour its commitments under the Malaysia Agreement 1963 (MA63), including an interim special grant of RM1.5 billion and doubling the number of Public Service Department sponsorships offered to students from Sabah and Sarawak to 4,200 annually.
Budget 2027 also prioritises the welfare of vulnerable groups, including senior citizens and persons with disabilities (PwDs). Assistance for senior citizens will be increased to RM1.3 billion next year, benefiting nearly 200,000 recipients, while the total allocation for assistance to PwDs will rise to RM1.5 billion, benefiting more than 300,000 people.
Anwar also said the Education Ministry would continue to receive the largest allocation, at nearly RM69 billion compared to RM66.2 billion this year. This includes RM1 billion for Early Schooling Aid, which will be increased from RM150 to RM200.
“This means a family with four children will receive RM800 to prepare for the 2027 school session,” he said, adding that the allocation would benefit 5.3 million pupils.
The Government has also agreed to defer loan repayments for National Higher Education Fund Corporation (PTPTN) borrowers earning up to RM2,500, while borrowers earning between RM2,500 and RM3,000 a month will only need to make minimum repayments of only RM50 a month. This measure will benefit more than 400,000 borrowers.
To encourage greater use of public transport, the Government will introduce the MyKomuter50 pass, which is expected to benefit 40,000 KTM Komuter users, while continuing the My50 pass for 300,000 Prasarana bus and rail commuters in the Klang Valley.
Fatal road accidents involving drunk drivers have prompted the Government to propose amendments to the Road Transport Act to mandate that drivers under the influence of alcohol or drugs pay compensation to victims.
Telematics systems will also be made mandatory in commercial vehicles to monitor speed, location and high-risk driving patterns.
The Home Ministry and Defence Ministry will each receive RM22 billion, with RM7.1 billion earmarked for the acquisition and maintenance of assets of the armed forces, the police and other uniformed bodies under the Home Ministry.
Border and cyberspace security will also be strengthened, with RM490 million allocated to the Malaysian Border Control and Protection Agency, alongside enhanced airport screening.
An allocation of more than RM130 million will be provided to support the local film, music and creative content sectors.
The Prime Minister announced an allocation of RM240 million for preparations to host the 2027 SEA Games and Asean Para Games, in addition to RM460 million for national sports development.
The Government has also allocated RM935 million for tourism and culture, including an extension of the Visit Malaysia campaign into next year, with grants will also be made available to industry players to promote and organise tourism events.
To strengthen Islamic affairs, the Prime Minister announced an increase in funding from RM2.6 billion to RM3.1 billion. In a further measure, 500 teachers under the Kafa Islamic education programme who teach pupils with special needs will receive a special allowance of RM150 a month.
Meanwhile, the Government, through Tabung Haji, will fully cover Social Security Organisation (Perkeso) contributions for all 40,000 imams, bilals, mosque caretakers and maintenance workers, as well as takmir religious teachers.
As the administration enters its fifth year, the Madani reform agenda will continue to be strengthened through legislation to tighten governance at government-owned entities entrusted with managing public funds and assets.
The Prime Minister said the proposed Government-Owned Entities Bill would cover government-linked companies and statutory bodies, helping to prevent a recurrence of past controversies.
“The Bill covers government companies and statutory bodies to prevent excesses such as the 1MDB scandal and the crises involving Tabung Haji and Felda from recurring,” Anwar said.
In recognition of the contributions of 1.6 million civil servants, the Prime Minister announced that the allocation for the construction and maintenance of quarters for police personnel, doctors, military personnel, teachers and firefighters would be increased to RM2.3 billion.
Meanwhile, allowances for Rela personnel, auxiliary firefighters, police volunteers and Civil Defence volunteers will be increased to RM9 per hour for volunteers and RM10.80 per hour for supervisors, with an allocation of RM339 million benefiting nearly 50,000 volunteers.
The Government has also agreed to increase the total maternity leave entitlement throughout the period of service from 360 days to 490 days, while RM20 million will be allocated to upgrade childcare centres at government facilities.
The minimum pension will also be raised from RM1,000 to RM1,350 a month, benefiting nearly 59,000 pensioners, Malaysian Armed Forces (MAF) veterans and derivative pension recipients.
At the conclusion of his Budget 2027 speech, Anwar announced Special Financial Assistance of RM1,500 for 1.3 million civil servants at Premier Grade B and below, including contract appointees.
“The assistance will be disbursed in two payments, before Aidilfitri and ahead of 70th anniversary of Malaysia’s independence,” he said.
This year’s Budget mobilises the country’s full resources amounting to RM510 billion, with government allocations totalling RM459.8 billion, comprising RM376.8 billion in operating expenditure and RM83 billion in federal development expenditure.
It also includes RM25 billion in investments by government-linked investment companies (GLICs), RM11 billion through public-private partnerships, and RM14.2 billion from federal statutory bodies and Minister of Finance Incorporated companies.
