KUALA LUMPUR – The absence of announcements on megaprojects in Budget 2025 is no cause for concern considering the many allocations granted to various other initiatives aimed at improving the rakyat’s welfare.
With a total RM421 billion allocation or 20.2% of the nation’s gross domestic product (GDP), Budget 2025 saw the Education Ministry receiving a historic allocation of RM64.1 billion, marking the largest ever funding provided to the ministry.
While the Education Ministry’s funding featured a RM2 billion allocation for upgrading and maintaining schools nationwide, the Health Ministry was the second-largest allocation receiver with RM45.3 billion, including RM1.35 billion for maintaining and repairing health facilities.
Other ministries and sectors were not excluded from receiving other benefits revealed in the budget, which increased by 3.3% compared to the previous year’s total allocation of RM407.5 billion.
According to Putra Business School associate professor Ahmed Razman Abdul Latiff, a majority of citizens can be deemed as “winners” of Budget 2025, due to increases in Sumbangan Tunai Rahmah (STR) allocations and continued subsidies for RON95 petrol, among others.
He told Scoop that while the budget did not include funds set aside for megaprojects, a typical norm in budgets brought by previous administrations, enduring allocations for other existing infrastructure projects are still of note.
He said this is because the infrastructure allocations are more focused on repairing and upgrading existing projects, such as schools and health facilities, which is expected to benefit the people directly.
Expressing similar sentiments, Malaysia University of Science and Technology economist Barjoyai Bardai said that the budget is evidence of how the Madani government has managed to properly distribute allocations so that expenditures are not “skewed” towards any specific sector.
Noting that the allocations determined by the government are likely to incentivise the markets of respective industries, Barjoyai said that measures should be put in place to ensure that assistance from the government reaches their target group.
Here are some of the highlights of the budget, the third federal expenditure to be tabled by Anwar and the final one under the 12th Malaysia Plan.
Minimum wage set to increase in February 2025
In tabling the budget, Anwar, who is also finance minister, said that starting February 1 next year, the minimum wage will be increased from RM1,500 to RM1,700 per month for employers with five and more employees, a move which has been lauded by various quarters.
Responding to the announcement, the Malaysian Trades Union Congress (MTUC) said the minimum wage increase is an important move which will aid in reducing the cost of living and aid lower-income communities struggling with inflation and global economic pressures.
Stressing that authorities must ensure employers’ compliance with the updated rate, MTUC president Mohd Effendy Abdul Ghani said the increase will not only improve workers’ standard of living but also drive economic growth by improving the rakyat’s purchasing power.
Separately, Malaysian Employers Federation president Datuk Syed Hussain Syed Husman commended the government for taking into account the challenges faced by micro, small and medium enterprises (MSMEs).
Highlighting how employers with fewer than five employees can postpone its adoption of the amended rate by six months, Syed Hussain urged employers who can afford higher salaries to pay above the minimum wage, saying: “It is only ethical and good practice for employers to remunerate their employees based on their employees’ and businesses performance.”
Besides that, the government has proposed that all foreign workers be required to contribute to the Employees’ Provident Fund while civil servants are set to receive a special cash aid of RM500 for those in Grade 56 and below.
Government retirees will also be entitled to RM300, with the fund scheduled to be channelled in January next year.
Increased STR, Sara financial aid for families, singles
Households receiving the STR and Sumbangan Asas Rahmah (Sara) cash aid are set to receive an annual amount of RM4,600 next year, compared to this year’s RM3,7000, due to an additional RM3 billion allocated to Rahmah initiatives.
As part of the total RM13 billion allocation, a total of 4.1 million STR recipients under the household category will receive an RM100 monthly Sara assistance next year, compared to 700,000 recipients this year.
The updated Sara assistance will be credited into recipients’ MyKad beginning April next year, with recipients under the singles category to receive STR of RM600.
Additionally, sales tax will no longer be imposed on basic food items starting May 1, 2025, with this move set to be implemented in stages, while an increase in excise duty on sugary drinks by RM0.40 per litre will be enforced on January 1 next year. – October 18, 2024