Budget 2025: Winners and losers of Putrajaya’s largest federal spending to date
(MM) : Prime Minister Datuk Seri Anwar Ibrahim tabled the country’s biggest ever federal spending plan in Budget 2025 yesterday, which he said is aimed at improving the economy and household income while consolidating the government’s finances.
Anwar, who is also finance minister, unveiled a RM421 billion spending plan in which he committed to cut Malaysia’s fiscal deficit to 3.8 per cent of the country’s gross domestic product, from around 4.3 per cent in 2024. Budget 2025 is 3.3 per cent more than this year’s RM407.5 billion.
Here, we look at some of the budget’s biggest winners and losers.
WINNERS
Minimum wage workers
A long awaited announcement, Anwar yesterday said the government would raise the minimum wage to RM1,700.
The last revision was in May 2022, when the wage floor went from RM1,200 to RM1,500, but the effects had been blunted in part by high inflation at the time.
During his announcement, Anwar said the country’s economic reforms could not be considered successful until Malaysians begin enjoying higher incomes.
Civil servants
The country’s public sector got the good news of an unexpected bonus in Budget 2025.
Anwar announced a special bonus of RM500 for all civil servants below Jusa Grade 56 including contract workers, who are already on track to receive salary increases of up to 15 per cent starting later this year under a new pay structure.
The special payment will also be given to all government retirees, including pensioned and non-pensioned veterans, amounting to RM250.
First time home buyers (and developers)
Under Budget 2025, the government will assist first-time home owners by offering tax relief of up to RM7,000 on their loan interest payments, with the maximum relief extended to buyers of homes valued at up to RM500,000.
Those buying residential property between RM500,001 and RM750,000 will get tax relief of up to RM5,000.
The relief will be good for three three consecutive assessment years for sale-purchase agreements (SPAs) finalised between January 1, 2025, and December 31, 2027.
The move could also benefit property developers sitting on unsold residential units in the price range.
Families caring for elderly parents
Currently the government gives individual income tax relief of up to RM3,000 annually on child care allowance received by employees or paid directly by employers to child care centres. That exemption will now be expanded to include elderly care both for parents or grandparents.
This is also on top of tax relief for family members paying for their grandparents’ medical treatment at clinics and hospitals, treatment and homecare nursing, day care centres and residential care centres.
LOSERS
High-income groups
Anwar yesterday repeated his insistence that the country’s “ultra-rich” should not be enjoying subsidies and assistance meant for lower income Malaysians, saying they should instead be helping to pay for government service like healthcare.
Among others, he announced:
the plan to do away with blanket petrol subsidy that will only affect the top 15 per cent of income earners from the middle of 2025.
a retargeting of boarding school subsidies to prevent the same group from getting assistance an increase in sales tax on “premium” food items such as salmon and avocado.
a 2 per cent tax on dividend payments on individuals receiving yields of over RM100,000 annually.
The sweet-toothed
Under Budget 2024, the excise duty on sugary pre-mixed beverages was raised by 10 sen per litre, from 40 sen to 50 sen, a hike meant to curb health risks associated with excessive sugar consumption.
Now, the government will almost double the sugar levy under Budget 2025 and raise if by 40 sen. This means the rate of tax you’d be paying for a litre of sweet drinks would be RM0.90. So how much would you be paying for some of your favourite sodas?
Source : MalayMail
