KUCHING: Budget 2025 has been hailed as a fiscal reform initiative to reduce spending while increasing taxes.
Sarawak Democratic Action Party (DAP) chairman Chong Chieng Jen said this approach is necessary as the national debt is projected to reach RM1.5 trillion by the end of 2024.
“This implies that for every Ringgit of government revenue, 16 sen will be allocated to pay interest on the loan, a result of more than two decades of continuous deficits,” he said in a statement here Saturday.
Chong also highlighted the “Robin Hood” nature of the budget, as it aims to tax the wealthy while helping the poor.
He noted that welfare benefits and cash handouts under this budget could help eliminate hardcore poverty in the country.
“Besides the cash handouts, more importantly is the raise in minimum wage rate from RM1,500 to RM1,700 which will across the board increase the income level of the lower income earners in our society.
“While the employers may face an immediate increase in the wage component of their costs, in macro perspective, this increase in wages will most likely be all spent in the local market as a boost to our domestic market and economy,” he added.
He highlighted the underpayment of workers in Malaysia, as reflected by the employee compensation to GDP ratio, which stands at only 33 per cent.
With 15.81 million employees in the country, Chong said the wage increase represents a step toward addressing this income imbalance.
Regarding the targeted subsidy for RON95 fuel, Chong said the reform is projected to save RM8 billion but hinges on effective implementation to ensure that only those truly in need continue to receive support.
“The government’s experience in rationalising diesel subsidies earlier this year gives me confidence that the RON95 subsidy reform will be carried out smoothly,” he added.
Chong also encouraged Sarawakian businesses to take advantage of the budget’s focus on Artificial Intelligence (AI) and digitalisation innovation to transform their production processes.
Meanwhile, he expressed disappointment that no adjustments were made to the e-invoicing threshold, which is set to become mandatory in August 2025.
He pledged to raise the issue in the upcoming parliamentary debate to advocate for a threshold increase to RM500,000 to ease the burden on hawkers, who are concerned about the additional costs.
“Overall, the Budget has set the right priorities by allocating the highest amount for education, followed by healthcare and then security. In order that the budget will achieve its purpose, the implementation thereof must be fair, equitable and efficient,” he added.
