Overview
- The government put forward the RM459.8 billion package on Oct. 9, 2026 that keeps operating spending high, allocates RM83 billion for development and projects a 2027 deficit of 3.3% of GDP.
- Prime Minister Anwar Ibrahim will raise the national minimum wage to RM2,000 from June next year with exemptions for micro and small firms, and introduce higher starting salaries for semi-skilled workers and graduates.
- Tax measures include raising individual income tax relief from RM9,000 to RM12,000 and cutting rates for selected middle-income brackets to ease cost-of-living pressures.
- The plan relies on a larger RM32 billion dividend from state oil firm Petronas and modest revenue growth to help fund higher spending while the subsidy bill remains elevated because of recent global energy price jumps.
- The budget is widely seen as an expansionary, politically timed package as Anwar’s coalition faces state election losses and internal tensions that have revived talk of possible snap national polls.