Easing the rakyat’s burden with continued social assistance, reliable infrastructure
As the government moves to situate the country as a prime destination for high-value investments, it has also showcased its continued commitment to support the rakyat in ensuring constant standards of living upliftment.

Besides the continuation of targeted subsidies for essential goods and services including fuel, electricity and healthcare, Putrajaya has earmarked significant investments to expand various public infrastructure.

The government has allocated RM1.35 billion to maintain health infrastructure, of which an increased sum of RM300 million – up from RM150 million in 2024 – has been set aside for the expansion and repair of dilapidated clinics across the country, including those in underserved areas.

Additionally, the government plans to enhance public healthcare services by targeting the well-off to contribute more while protecting lower-income rakyat from additional costs.

Another avenue the government is taking to uplift living standards investing in education, particularly for the underprivileged. This will be achieved through various initiatives including expanding access to vocational and technical training and improvement of public schools and boarding schools.

Meanwhile, various investments will be made in the country’s public transport and road network to ensure it is efficient, affordable and comfortable for all citizens. This includes a RM273 million allocation to expand bus services in every state and major city, RM1.6 billion to upgrade federal roads, and further passenger train procurement by Prasarana Malaysia Bhd.

The government will also continue the My50 monthly pass for the benefit of 180,000 Klang Valley residents using Prasarana Malaysia Bhd’s buses and rail services with a RM216 million allocation. These initiatives are designed to reduce the transportation costs for the rakyat, particularly low-income groups.

Amidst all these measures to lighten the rakyat’s burden and uplift standards of living, the government has also earmarked an increased allocation of RM13 billion for financial aid programs Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA).

Towards raising income, the government has also moved to hike the minimum wage to RM1,700, from the current RM1,500, effective February next year.

Disciplined but expansionary budget
Supplementing the government’s efforts to stimulate the economy and ease the rakyat’s burden, Putrajaya has bolstered its commitment to ensure public funds are being used efficiently and transparently as well as ensure public services are being delivered effectively.

Budget 2025 places significant emphasis on reducing the national deficit and managing public debt, committing to reducing the deficit from 5% in 2023 to an estimated 3.8% in 2025 to be achieved with a phased reduction in borrowing.

A key part of the government’s fiscal responsibility framework is the reform of subsidies – shifting away from blanket subsidies, which have historically benefitted wealthy Malaysians and foreign nationals more so than the larger population, to a more targeted support for lower-income households.

The next step of the subsidies reform will be on RON95 fuel. The government plans to implement targeted subsidies for RON95 in mid-2025, whereby 85% of the rakyat will continue to benefit from subsidised petrol. Removing the subsidy from the top 15% of RON95 consumers – constituting wealthy households, foreigners and businesses – is expected to save government coffers RM8 billion.

Together with an expansion to the sales and services tax (SST) to include certain commercial services, especially those operating on a fee-based model, expected to add RM5 billion to the government’s revenue, the policy moves are aligned with making Malaysia more progressive and equitable.

Amplifying the government’s disciplined fiscal management, Budget 2025 encourages the use of PPP to deliver key infrastructure projects which will alleviate some of the fiscal burden on public funds. Key projects to be implemented under this mode of collaboration include the Penang LRT (Light Rail Transit), the aforementioned Johor-Singapore RTS and several highway expansions.

Even with the fiscal responsibility measures, overall development expenditure from the government and government-adjacent entities – government-linked investment companies (GLICs) and PPP projects – for next year remains substantial at RM120 billion.

On public service delivery, Putrajaya has set up the Special Task Force for Agency Reform (STAR) to address inefficiencies in public service to address rakyat-centric issues, such as dilapidated schools and clinics, congestion in hospitals and immigration counters, as well as ease of doing business.