The following commentary is contributed by Taylor’s University School of Accounting & Finance, Faculty of Business & Law senior lecturer Dr Paul Anthony Maria Das
The Pre-Budget Statement 2027 identifies many of the right priorities, from easing cost-of-living pressures to creating better jobs and building a more productive and innovative economy.
The challenge now is delivery. Malaysia has made progress in strengthening economic growth, attracting investment and consolidating its fiscal position. However, headline indicators offer limited reassurance if wages do not keep pace with expenses or if households do not experience better employment opportunities and public services.
Budget 2027 should therefore be measured not only by how much the Government allocates, but by the difference it makes to people’s lives.
Protect household purchasing power
Cost of living must remain the immediate priority. Food, housing, healthcare, education, childcare and transportation continue to absorb a substantial share of household income.
Targeted assistance through Sumbangan Tunai Rahmah, Sumbangan Asas Rahmah and other programmes remains important, particularly for vulnerable households. However, Malaysia cannot depend indefinitely on cash assistance to compensate for weak income growth.
The more sustainable solution is to raise productivity and real wages while addressing the structural causes of high household expenses. This requires stronger food supply chains, reliable public transport, affordable healthcare and childcare, and housing located near employment centres.
Middle-income Malaysians also require greater attention. Many earn too much to qualify for substantial assistance but continue to face high housing, education, healthcare and caregiving costs. The government should review whether personal income tax reliefs adequately reflect these pressures and consider household circumstances such as family size, location and caregiving responsibilities.
Make better wages the measure of economic success
Malaysia must gradually move beyond relying on increases in the statutory minimum wage as the main instrument for improving incomes. The larger goal should be to create jobs that offer meaningful wage growth, career development and economic security.
Business and investment incentives should be tied more closely to productivity improvements, employee training, wage progression and the creation of skilled Malaysian jobs.
Similarly, investment should not be assessed only by the value of projects approved. Malaysia must examine whether these projects are implemented, transfer knowledge and technology to local firms, and generate well-paying employment.
The same principle should apply to small and medium enterprise assistance. Support for digitalisation, artificial intelligence, automation, financing and export development should help firms raise productivity, enter new markets and create better jobs rather than merely enabling them to survive.
Connect education to economic opportunity
Budget 2027 is right to emphasise technical and vocational education and training; science, technology, engineering and mathematics; artificial intelligence and collaboration between education and industry. However, success cannot be measured simply by enrolment numbers, training places or the number of graduates produced.
Greater attention should be given to graduate salaries, underemployment, skills matching and career progression. Universities should also receive more competitive funding for research addressing Malaysia’s economic, technological and social challenges.
Stronger connections between education, research and employment would help retain Malaysian talent. Highly skilled Malaysians are more likely to remain when they see meaningful opportunities for professional development, innovation and career advancement.
Prepare for housing and ageing pressures
Housing policy should focus not simply on building more homes, but on ensuring they are genuinely affordable relative to household income and located near employment, public transport and essential services.
Malaysia must also prepare more seriously for an ageing population. Budget 2027 should strengthen preventive healthcare, retirement savings, elderly care services and support for families with caregiving responsibilities. Opportunities should also be created for older Malaysians who wish to remain economically and socially active.
Build trust through transparent reform
Fiscal consolidation, better-targeted subsidies and stronger revenue collection are necessary for Malaysia’s long-term financial sustainability. However, further reforms must be carefully designed and sequenced to avoid intensifying cost-of-living pressures.
If a broader consumption tax is considered, essential goods must remain protected, while vulnerable and lower-middle-income households should be adequately compensated.
Malaysians must also be able to see where the savings from difficult reforms are going. The government should publish clear indicators showing whether its expenditure has reduced hospital waiting times, improved school facilities, raised household incomes, strengthened graduate employment or made public transport more reliable.
Ultimately, Budget 2027 does not simply need to be bigger. It needs to be better targeted, transparent and accountable. Economic reform will be sustainable only when Malaysians can feel its benefits through stronger purchasing power, better wages, quality employment and improved public services.
