THE TIGER SHOW PODCAST| S2 | EP91 | Belanjawan 2027: Rakyat senang atau sekadar bertahan?

Executive summary

Economist Dr. Mohamad A. Khalid argues that Malaysia’s 2027 budget may ease short-term pressure through cash assistance and subsidies, but does too little to raise wages, improve public services, or build long-term productivity. He recommends assessing the budget against the 13th Malaysia Plan’s goals: a higher-income, developed, sustainable, and inclusive economy.

His central concern is that spending is not sufficiently directed toward the people and investments that could improve future outcomes. He identifies education and health capacity, wage growth, subsidy targeting, graduate underemployment, and public-sector integrity as priorities.

Policy priorities and execution playbook

Measure outcomes, not just spending or GDP growth

• Track whether growth improves purchasing power and workers’ share of national income.
• The 13th Malaysia Plan target cited is to raise employee compensation from about 33% to 40%.
• The guest also references an ambition for Malaysia to rank among the top 30 developed countries.

Redirect subsidies to households that need them most

• Phase down fuel subsidies for higher-income groups rather than removing them abruptly.
• Reduce quotas progressively and redirect savings to lower-income households and essential services.
• Review blanket cash payments as well as fuel subsidies, since universal payments also reach people who do not need assistance.

Make minimum-wage policy fair and broadly applicable

• The guest supports raising the minimum wage but criticizes a system in which workers’ eligibility may depend on employer size or sales.
• He recommends extending the wage floor to all minimum-wage workers, rather than treating workers doing similar jobs differently at large companies and SMEs.
• He argues that wage policy alone is insufficient without more quality jobs and stronger productivity.

Protect long-term investment in education and health

• Prioritize school capacity, teacher availability, learning outcomes, and hospital capacity.
• The guest links underinvestment in these areas to weaker skills, lower social mobility, and the risk that future high-value industries will not benefit most workers.

Strengthen governance and spending accountability

• Assess public spending by whether it delivers demonstrable benefits.
• The guest emphasizes that laws and agencies alone are not enough: integrity among officials and enforcement bodies is essential to public trust and investor confidence.

Key figures and KPIs cited

The figures below come from the discussion and should be treated as the guest’s claims. Some details in the subtitles are unclear.

Economic growth and wages

• GDP grew 6% in the second quarter, according to the discussion, with growth attributed partly to investment in AI and data centres and to chip exports.
• From 2020–2025, wages reportedly rose 8% while inflation rose 10%, implying a 2% decline in purchasing power.
• Food inflation was cited at 18%.
• Graduate salaries were said to have fallen by 11% on average; the period and calculation are not fully clear in the subtitles.
• About one in three graduates was described as working in a role that does not require their qualifications.
• The guest says productivity growth outpaced wage growth over roughly 2019–2024/25.

Budget, subsidies, and public finance

• STR and SARA assistance was said to rise from RM15 billion to RM16 billion.
• Fuel subsidies were discussed at around RM40 billion annually. The guest estimates that roughly RM20 billion benefits higher-income groups. He also cites estimates that the top 20% receive about 50–53% of the benefit, while the bottom 20% receive about 4%.
• The guest says 30% of the bottom 20% do not own a car or motorcycle, limiting the benefit they receive from fuel subsidies.
• The budget was described as collecting about RM480 billion and spending roughly RM477 billion on operating costs, leaving little room for development spending before borrowing. The government was said to borrow about RM80 billion.
• Fiscal-deficit targets cited were 3.3% of GDP in 2027, moving toward 3% in 2028.
• Debt servicing was described as around 16.7–17% of revenue, or approximately RM60 billion.
• The guest estimates that two years of RM40 billion annual fuel subsidies would total RM80 billion—enough, by his comparison, to fund about 160 large hospitals at RM500 million each.

Taxes and minimum wages

• The minimum wage was described as rising from RM1,700 to RM2,000. The guest criticized reported limits on coverage based on company size or sales.
• The tax rate for people earning over RM1 million was said to increase to 30%.
• A 1% middle-income tax reduction and an increase in tax relief from RM9,000 to RM12,000 were also cited.
• The guest says Malaysia’s tax take is about 12% of the economy, which he considers low compared with many developed countries.

Education and future industry

• The guest cites OECD/PISA results indicating that about two-thirds of Malaysian 15-year-olds cannot solve basic mathematics problems, with only around 0.6% reaching the highest performance level.
• He says learning outcomes have worsened since 2018 and describes a substantial gap between richer and poorer students.
• Data centres’ electricity demand could reach around 20% of national use by 2030, according to the discussion; the current-use figure in the subtitles is unclear.

Business and organizational implications

• Growth sectors need stronger local spillovers. Investment in AI, semiconductors, and data centres may raise GDP, but the guest argues that data centres create relatively few jobs and can put pressure on electricity and water supplies. He recommends evaluating projects by job creation, job quality, local skills development, and resource use—not investment volume alone.
• Align workforce skills with the jobs being attracted. Graduate underemployment suggests a mismatch between the jobs generated and workers’ qualifications. More quality roles and stronger education outcomes are needed for productivity gains to translate into higher pay.
• Use transparent, outcome-based measures. Relevant measures raised in the discussion include real wage growth, employee compensation as a share of national income, graduate underemployment, learning outcomes, subsidy incidence, development spending, debt-service burden, and service capacity.

Presenters and sources

• Host/presenter: Amen (name rendered this way in the subtitles; spelling uncertain).
• Guest: Dr. Mohamad A. Khalid, lecturer and economist.
• Source: The Tiger Show Podcast, Episode 91. The opening also references Astro Awani viewers.