Budget 2025 Focuses on Wages, Health, and New Taxes
Updated on: October 29, 2024 8:19 pm GMT
As Malaysia prepares for the unveiling of Budget 2025, Prime Minister Anwar Ibrahim emphasized that addressing inflation and boosting wages will be central to the government’s agenda. Set to be presented on October 18, this budget comes in the wake of rising living costs and stagnant wages, which have become pressing issues for many Malaysians.
Key Focus Areas in Budget 2025
Prime Minister Anwar highlighted the critical areas the budget will target:
- Inflation Management: Prices of essential goods in Malaysia, such as edible oil, petrol, and flour, remain lower compared to neighboring countries. However, the Prime Minister acknowledged that merely lowering prices is insufficient without corresponding wage increases.
- Wage Increases: “The level of income has not increased, amidst an increase in productivity or investments,” Anwar remarked. His prior actions to raise civil servants’ salaries demonstrate a commitment to improving earnings for public sector workers.
By focusing on these two issues, the government aims to provide immediate relief to citizens struggling with the cost of living.
Recent Economic Indicators
In recent months, Malaysia’s inflation rate has shown signs of stabilization. According to the Department of Statistics Malaysia (DoSM), August 2024’s inflation rate moderated to 1.9% year-on-year, a figure slightly below expectations. This moderation points to various economic dynamics, including:
- Increases in costs related to restaurant and accommodation services (3.2%).
- Personal care and miscellaneous goods and services (3.2%).
- Housing and utilities, which saw a rise of 3.1%.
- Recreation and culture impacted by a 2.0% increase.
The adjustment in these sectors highlights how inflation is affecting consumer spending in different areas of daily life.
Addressing Wage Disparities
Anwar is particularly concerned about the disparity between rising profits in certain sectors and stagnant wages for workers. He emphasized the importance of ethical wage practices, especially among private sector conglomerates reporting significant profits.
- He stated, “If you register profits of between RM1 billion and RM4 billion, you cannot justify paying your workers in that manner.” This sentiment underscores a growing call for businesses to share profits more equitably with employees.
Government Actions on Salaries
To tackle wage stagnation, the government has announced significant salary increases for civil servants:
- A 15% increase for employees in the implementing, management, and professional groups.
- A 7% increase for top management positions.
These increases will be rolled out in phases starting from December 1, 2024, with full implementation completed by January 1, 2026. This initiative marks the first wage adjustment for civil servants in 12 years, reflecting the government’s response to evolving economic conditions.
Looking Ahead
In a broader economic context, Budget 2025 is expected to introduce five new taxes aimed at promoting health and sustainability. The details of these taxes are anticipated to be discussed in the upcoming budget announcement.
Anwar stated that the government’s initiatives would provide the necessary support to address issues like low wages, emphasizing moral responsibility within the workforce.
Possible Future Changes in Minimum Wage
Discussions about raising the minimum wage to RM2,000 are also gaining traction as part of the government’s ongoing efforts to improve financial stability for workers.
The National Union of Journalists Malaysia (NUJM) has also voiced concerns over unpaid media wages, indicating a broader issue with wage security that spans multiple sectors. These developments highlight the urgency for systemic wage reform in the nation’s economy.
Conclusion
As Malaysians look forward to the detailed proposals in Budget 2025, there’s a sense of optimism that the government’s attention to inflation and wages will bring meaningful improvements to living standards. By directly addressing these challenges, Prime Minister Anwar Ibrahim’s administration hopes to create a fairer economic environment. In the coming weeks, we can expect not only figures but also essential policies that could transform the financial future for many in Malaysia. Stay tuned for the latest updates and insights.