By TNS News Team
KUALA LUMPUR, Oct 19 – Prime Minister Datuk Seri Anwar Ibrahim tabled the 2025 Budget in Parliament on Friday (October 18), unveiling a people-centered financial plan designed to empower Malaysians and revitalize the economy. The RM421 billion budget, the third under the Madani framework, prioritizes addressing the cost of living, increasing wages, driving economic reforms, and ensuring a more efficient government. Anwar’s plan reflects his administration’s commitment to bringing relief to the rakyat while laying the groundwork for long-term prosperity.
“Our goal is not merely to grow the economy but to ensure that the wealth generated is equitably shared,” Anwar stressed. “Through this Madani Budget, we will empower the people, reform the economy, and prosper the nation.”
Addressing Cost of Living and Inflation
Central to the budget is the initiative to combat inflation and rising costs that have disproportionately affected lower- and middle-income groups. Anwar announced enhanced cash assistance programs, including targeted subsidies for essential items such as rice, cooking oil, and electricity.
These measures aim to shield the most vulnerable from economic uncertainties. Additionally, petrol subsidies will be restructured to focus on those who need them most. The government projects inflation to remain between 2% and 3.5%, with measures to stabilize prices for essential goods.
Wage and Social Reforms
The budget introduces a significant wage reform, with a historic adjustment to the minimum wage, marking the first increase in 12 years. Minimum wage will increased from current RM1,500 to RM1,700 from February 1, 2025. “The adjustment is long overdue,” Anwar said, “and it is a timely intervention that aligns with the rising cost of living and the demands of a more competitive economy.”
Furthermore, civil servants will benefit from salary adjustments, with larger increments for those in lower pay grades, which the Prime Minister emphasized as necessary for bridging the wage gap and improving living standards.
An illustration marking the minimum wage hike to RM1,700 and expanded EPF contributions, reflecting the 2025 Budget’s push for economic equity.
Anwar also emphasized the importance of social security reform, mandating that non-citizen workers contribute to the Employees Provident Fund (EPF). This policy aims to enhance retirement savings inclusivity and protect all workers regardless of nationality.
“Our broader effort is to ensure every worker has a dignified retirement,” Anwar stated, linking these reforms to the overall goal of social equity.
Economic Growth Projections and Fiscal Targets
Budget 2025 sets an ambitious economic agenda, with the government projecting GDP growth of 4.5% to 5.5% for the coming year, following a forecast of 4.8%-5.3% growth in 2024.
Revenue is expected to rise by 5.5% to RM339.7 billion, driven by reforms to expand the tax base, including the implementation of a global minimum tax and adjustments to the Sales and Service Tax (SST).
These measures are part of efforts to diversify revenue sources and achieve fiscal sustainability.
The budget targets a reduction in the fiscal deficit to 3.8% of GDP in 2025, down from 4.3% in 2024.
“We are committed to reducing the deficit, but not at the expense of the rakyat’s welfare,” Anwar assured, noting that prudent fiscal management remains a priority.
Investing in Healthcare, Education, and Infrastructure
Healthcare and education remain prominent aspects of the budget, with significant allocations aimed at expanding access and improving quality.
Public hospitals will see increased funding for facilities and services, while financial aid programs for students from lower-income families will be bolstered.
“We cannot ignore the central role of education and healthcare in building a resilient society,” Anwar remarked, highlighting these as “pillars of the MADANI economy.”
Development expenditure has been set at RM86 billion, with allocations for infrastructure projects, digital connectivity, and sustainable energy, signaling the government’s commitment to long-term resilience and sustainability.
Key projects include the expansion of public transportation networks and the development of renewable energy facilities, aimed at fostering a green economy.
Streamlining Government and Supporting Businesses
The budget also emphasizes streamlining government services to eliminate bureaucratic inefficiencies. According to Anwar, these reforms are not only about cost-saving but are essential to “restore public trust in government institutions.” He added, “Our people deserve a government that works efficiently for them, and that is what we are striving to achieve.”
In line with fostering inclusivity, Budget 2025 contains provisions to support women in the workforce, young entrepreneurs, and small businesses.
Specific grants and loans will be made available to help women start businesses and rejoin the labor market, while young entrepreneurs can look forward to increased funding for start-up support.
Small businesses, which make up a large part of the economy, will benefit from tax incentives and easier access to credit.
A Comprehensive Plan for All Malaysians
“This is a budget for all Malaysians,” Anwar concluded. “We have heard your concerns, and we are acting on them. Our approach is grounded in justice, compassion, and the aspiration to build a nation that leaves no one behind.”
The Madani Budget 2025 represents not only a response to pressing economic issues but also a vision for a more equitable Malaysia. It aims to create a balanced and inclusive economy, where growth is shared, the cost of living is manageable, and social safety nets are accessible to all.
TNS News