From student hunger to bigger Sara aid, what could Budget 2027 have in store for Malaysians?

KUALA LUMPUR, Oct 9 — All eyes will be on Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim as he tables Budget 2027 in the Dewan Rakyat this afternoon.

Anwar’s fifth national Budget since taking office in 2022 comes amid growing speculation over an early 16th general election (GE16), raising expectations that it could be an election-year spending plan.

The Budget comes at a time of geopolitical uncertainties rattling global fuel markets and continued cost-of-living pressures on Malaysians.

Household finances, wages and social assistance are expected to feature prominently, although the extent of the government’s commitments will only become clear when Anwar delivers his Budget speech.

The big picture: Growth, living standards and governance

According to the Finance Ministry, Budget 2027 is built around three core priorities: raising the ceiling for national growth, raising the floor for living standards and driving reform in governance.

These priorities underpin 10 focus areas, including social justice, easing cost-of-living pressures, strengthening social protection and improving access to education, healthcare and essential services.

Other priorities include workers’ welfare and decent wages, better governance and public service delivery, support for home-grown entrepreneurs, investment-driven growth and high-value jobs, as well as strengthening energy, food, climate and cyber security.

In recent weeks, Anwar and several Cabinet ministers have signalled possible measures aimed at easing cost-of-living pressures and improving Malaysians’ livelihoods.

More cash aid through STR and Sara?

In July, Anwar raised the possibility of increasing cash assistance under the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) schemes in Budget 2027 amid rising cost-of-living pressures.

When tabling Budget 2026 last year, Anwar announced a record RM15 billion for both schemes, up from the initial RM13 billion allocated for 2025, with about nine million recipients expected to benefit.

Anwar is expected to announce measures under Budget 2027 to address student hunger at Malaysian universities. — File picture by Yusof Isa

Tackling hunger on university campuses

On October 3, Anwar said Budget 2027 would address the plight of university students struggling to afford daily meals, after hearing accounts of students going hungry and surviving on instant noodles.

Under Budget 2026, the government allocated RM26.9 million for Dapur Siswa Madani and campus food-bank programmes, with Anwar announcing an additional RM15 million in January 2026.

The student kitchen programme, aimed at benefiting some 10,000 students, has been implemented across all 20 public universities.

A RM2,000 minimum wage on the cards?

Last month, Anwar noted that wages in Malaysia remained stagnant despite higher productivity, particularly in larger corporations, plantations, factories and industries recording substantial profits.

A proposed increase in the minimum wage from RM1,700 to RM2,000 could also feature in Budget 2027.

Economy Minister Akmal Nasrullah Mohd Nasir previously indicated that an announcement could be made during the tabling of the Budget.

Akmal Nasrullah had also said wage compression was preventing many Malaysian workers from enjoying progressive wage increases once they moved beyond the minimum wage level.

Malaysia raised the minimum wage from RM1,500 to RM1,700 per month in February 2025, with the increase extended to employers with fewer than five workers in August that year.

The government aims to raise the minimum wage to RM3,000 by 2030 under the 13th Malaysia Plan.

In May 2025, six major government-linked investment companies (GLICs) also announced that they had implemented a living wage policy for their permanent Malaysian employees, using a benchmark of around RM3,100 a month.

Anwar has also signalled the possibility of higher allocations for small traders and entrepreneurs under Budget 2027. — File picture by Farhan Najib

More help for hawkers and small businesses

Last month, Anwar signalled the possibility of higher allocations for small traders and entrepreneurs nationwide.

He urged village traders to nominate others who deserved financial assistance under Budget 2027.

As of June, Anwar’s government had allocated RM9.8 billion in financing through six major institutions to expand and simplify access to microcredit for hawkers and small entrepreneurs.

Will a GST-SST hybrid tax model take shape?

Another question surrounding Budget 2027 is whether Anwar will provide an update on a proposed hybrid taxation system combining elements of the current Sales and Service Tax (SST) and the former Goods and Services Tax (GST).

In August, Anwar directed the Finance Ministry to study the idea in detail, with Finance Minister II Datuk Seri Amir Hamzah Azizan overseeing the review.

Subsequently, government spokesman Datuk Seri Fahmi Fadzil said the findings would be brought back to the Cabinet for discussion.

It is understood that the hybrid model would draw lessons from Malaysia’s previous experience with GST while addressing challenges under the existing SST system.

However, no timeline has been announced for a decision, leaving it unclear whether the proposal will feature in Budget 2027.

More money for defence and military facilities

Anwar has pledged to increase defence spending in Budget 2027, including funding for asset procurement, upgrades to living quarters, a new hospital and the maintenance of basic facilities.

He pointed out that the government had progressively increased defence spending by more than 35 per cent.

Under Budget 2026, the government increased the Defence Ministry’s allocation to RM21.7 billion, up from RM21.2 billion in Budget 2025 and RM16 billion in Budget 2022.