Judge Budget 2027 by what it delivers, not what it spends

Budget 2027 puts RM510 billion of spending and investment on the table. The more useful question is what each ringgit delivers: better jobs, more productive businesses and stronger domestic industries.

That was the message from Bait Al Amanah senior analyst Ng Sze Fung, in comments reported by The Sun on 14 October. In his words:

Budget 2027 should ultimately be judged not by how much the government spends, but by whether that spending delivers better jobs, more productive businesses and stronger domestic industries. Every additional ringgit must work harder; strengthening Malaysia's productive capacity today while creating lasting economic returns for tomorrow.

The numbers are big, the room to move is small

The spending and investment envelope rises 8.5%, from RM470 billion in 2026 to RM510 billion. Growth, meanwhile, is forecast to moderate from 4.8–5.3% in 2026 to 4.2–5.2% in 2027.

The fiscal deficit is projected to narrow from 3.6% of GDP in 2026 to 3.3% of GDP in 2027. Operating expenditure of RM376.8 billion, plus debt servicing and other recurring commitments, limits flexibility.

So a bigger budget does not guarantee stronger growth. What matters is whether every additional ringgit is stretched to create better opportunities for Malaysians and wider benefits for the economy.

Four tests for Budget 2027

1. Does SME financing lift productivity? Financing facilities and loan guarantees rise from RM50 billion to RM57 billion. Access to finance alone will not make small firms more productive. They also need help adopting technology, building workers' skills and reaching larger markets. Financing should come with technical assistance, workforce development and links to industry, and be judged on productivity, market expansion and better-paying jobs, not on how much is disbursed.

2. Does tax relief reward investment? The one-percentage-point cut in income tax rates for eligible SMEs and MSMEs should come with incentives for productive investment. Existing tax incentives deserve a review, and compliance should be strengthened so that revenue forgone delivers meaningful returns. As Sze Fung put it, the real question is whether the tax system encourages firms to invest, become more productive and create better jobs.

3. Do government-linked investments build domestic capacity? Under GEAR-uP, government-linked investment companies will mobilise RM25 billion. They should be assessed on whether the money helps domestic companies commercialise technology, strengthens local supply chains and creates high-skilled jobs, while staying commercially sustainable.

4. Does cost-of-living support go beyond subsidies? Subsidies remain necessary to cushion immediate pressure. But better wages, affordable transport and reliable public services make living costs easier to manage over time. And income classifications alone may not capture what households actually face, including living costs, access to public transport and family responsibilities.

The bottom line

A budget is announced in a day and tested over years. Each of these four measures should say what it is meant to change, and then report on it. That is how Malaysians can tell whether the ringgit is working.

Read the original coverage: https://thesun-ipaper.cld.bz/20261014/2/ [Page 2, Right Hand Side]