Budget 2025: Ambition or a Bigger Price to Pay?
Prime Minister Anwar Ibrahim’s Budget 2025 is stirring up discussions, and rightfully so. Sure, the minimum wage increase to RM1,700 is a step forward, but the devil’s in the details. When you raise wages across the board, what happens? The cost of goods goes up. Employers, especially in the private sector, will pass the higher wage costs down the line. And who ends up paying for it? You guessed it—the consumer.
Then there’s the talk of fuel subsidy cuts. Anwar is looking to trim government spending by removing subsidies, but is the timing right? With the cost of living already high, removing fuel subsidies will cause transportation costs to skyrocket, which in turn raises the price of everything. Food, goods, services—everything becomes more expensive because logistics are tied to fuel. It’s simple economics.
Now let’s talk about the sugar tax. The idea is to curb unhealthy consumption, but in reality, it’s going to hurt the lower-income group. Sugary drinks are cheaper, and without affordable alternatives, this tax feels like punishing the poor. The government says it’s about health, but without a plan to subsidize healthier food options, it’s just another tax on the rakyat’s wallet.
Anwar seems confident that market forces will balance things out, but we’ve seen this before. When subsidies are pulled too fast, prices don’t settle—they spike. And when prices spike, it’s the average Malaysian who struggles. Raising wages is great in theory, but without controlling the rising cost of goods, it’s like giving with one hand and taking away with the other.
What’s the way forward?
1. Gradual subsidy removal: Don’t yank away fuel subsidies overnight. Give the market time to adjust, and ensure that wages rise proportionally, so people aren’t left scrambling to pay higher prices.
2. Tie minimum wage increases to productivity: Increasing wages without improving productivity will only lead to inflation. Incentivize businesses to raise productivity along with wages, so costs don’t spiral out of control.
3. Regulate essential goods prices: If wages are going up, there needs to be some control on the prices of essentials like food and transportation. Otherwise, the wage hike will be meaningless as inflation eats away at any real gains.
4. Make healthier food affordable: If you’re going to tax sugar, make sure people have cheaper, healthier alternatives. Subsidizing fresh food will make the sugar tax more than just a burden on the lower-income groups.
In the end, Budget 2025 is filled with ambition, but without careful execution, it could be the very thing that makes life harder for the rakyat. Raising wages, removing subsidies, and taxing sugar all sound good on paper, but without real measures to control costs, this budget risks pushing the rakyat into deeper financial trouble. Anwar may be taking bold steps, but without a clear plan to manage the fallout, the budget risks becoming a burden instead of a benefit.
RAJA SARA PETRA
