ALOR STAR: An economist has lauded the government's efforts to improve livelihoods and address the rising cost of living through strategic allocations in the 2025 Budget.
Associate Professor Dr Irwan Shah Zainal Abidin of Universiti Utara Malaysia described the government's decision to raise the minimum wage from RM1,500 to RM1,700 per month, effective Feb 1 next year, as a timely measure.
He also welcomed allocations supporting the implementation of the progressive wage policy.
"This budget focuses more on the economic welfare of the people, especially in raising incomes to address the rising cost of living.
"One of the key initiatives is the increase in the minimum wage and the allocation for implementing a progressive wage policy.
"This adjustment to the minimum wage is appropriate at this time, aligning with the increase in civil servants' salaries," he told the New Straits Times today.
Prime Minister Datuk Seri Anwar Ibrahim announced the wage increase during the tabling of the 2025 Budget in Parliament yesterday, clarifying that it would apply to employers with five or more employees.
Additionally, Anwar confirmed that the progressive wage policy, following its pilot implementation in June, would be rolled out in full next year. With a RM200 million allocation, the programme was expected to benefit 50,000 workers.
Anwar also announced that RM13 billion had been allocated for the Rahmah Cash Aid (STR) and Sumbangan Asas Rahmah (Sara) initiatives next year, which would support nine million Malaysians.
However, Irwan, who is also a lecturer at UUM's School of Economics, Finance and Banking, said whether this increase in income could translate to greater purchasing power depended on several factors.
"First, the effectiveness of the targeted subsidy mechanism for RON95 petrol, and how the government will define and present data on Net Disposable Income (NDI) and the Basic Living Expenses Benchmark," he explained.
Commenting further, Irwan welcomed the rise in Rahmah Cash Aid (STR) and Sumbangan Asas Rahmah (Sara).
"It also remains unclear whether those categorised under the T15, from whom many subsidies have been withdrawn, are truly among the wealthy," he added.