Malaysia's budgets have always been about the economy and people. Who gets to cheer more varies with each budget. The 2025 Budget, too, is a story about a cheer here and a cheer there. But first a word or two about its spend-and-earn story.
For the first time ever, our national expenditure speeds past RM400 billion to RM421 billion. And for the longest time, government revenue has been playing catch-up, with the 2025 Budget registering RM339.7 billion in earnings. Will this "low" do for Malaysia, racing as it does to be a high-income nation by 2030? A good question.
For a nation with a debt of more than RM1 trillion, budget watchers had expected more pain. One economist, Datuk Dr John Anthony Xavier, on a search for some pains in the 2025 Budget, seems to have found little evidence of such.
The Goods and Services Tax (GST) could have been one, but it was given a miss for an expansion of the Sales and Services Tax (SST), a small revenue earner for the government.
GST is, based on history, a big revenue booster for Putrajaya. When it was introduced in April 2015, it added RM37.7 billion to the government coffers for the year, as reported by Bernama. Then it was an up-and-away story — topping at RM60 billion — until SST took its place in September 2018, making the public purse forgo an estimated RM30 billion a year.
The expansion of SST will add a bit more, but it is still no match for GST. The SST has one thing going for it, though. It is less of a political hot potato.
The removal of the RON95 petrol subsidy would certainly be a pain for some, but Putrajaya promises to catch only the top 15 per cent earners and foreigners. In other words, not a removal but a targeted subsidy. And that, too, is set for mid next year.
Perhaps the postponed pain is to make sure that only the T15 are affected, though the definition of who they are is up for debate. If this goes according to plans, then it would not only save Putrajaya RM8 billion, but also spare those whose household income is just enough to make ends meet.
Inflation may be two per cent now, but it sure feels a lot more. The government may have mulled inheritance tax, judging by the hot debate in the media days before Oct 18. Even a few lawmakers joined the fray to oppose it. Be that as it may, the 2025 Budget did without it.
To Xavier, this is a wise decision, but he would have preferred the 2025 Budget to implement a wealth tax, a bigger revenue earner. One reason why the 2025 Budget didn't include it — speculation, though, this is — is because Putrajaya is engaged in efforts to get the wealthy to bring home their wealth to spur economic growth.
Finally, a word about labour, the much-ignored factor of production. With capital, labour is, as always, the tail chasing the dog. But Oct 18 had good news for workers.
The minimum wage is up by RM200, with the budget promising to put more money in Malaysians' pockets. Overall, the 2025 Budget is a story of more gain than pain.