[COLUMNIST] Approaching 70 years of independence: 2027 budget a national pledge, not just money

DEWAN RAKYAT, 12 OCTOBER 2026 —

On Friday, October 9, 2026, Prime Minister Datuk Seri Anwar Ibrahim stood in the Dewan Rakyat to present the fifth MADANI Budget for 2027, a fiscal document he framed not merely as a financial allocation but as a "National Promise" or Waad Nasional.

The core of this narrative is the concept of "waad," a term that gained widespread attention on social media following the speech, where infographics highlighted unique words such as "lighad," "pranata," and "inayat." The Prime Minister explicitly defined the budget’s theme as "Reaching for the sky, rooted in the earth," structured around eight pillars.

In this framework, the state provides the space and opportunities, the people fill them with substance, and the government safeguards the trust. This philosophical underpinning contrasts with the traditional public reading of budgets, which typically focuses on immediate questions of allocation, beneficiaries, and timing. The Prime Minister argued that while money is spent within a single financial year, a promise is measured over a generation, requiring both parties to hold the rope of commitment.

To ground this abstract concept in historical and cultural context, the Prime Minister drew upon diverse literary sources.

He cited the Malay poet Raja Ali Haji, specifically the "Gurindam Dua Belas" from 1847, and the Tamil sage Thiruvalluvar, quoting verse 731 from the Tirukkural: "Thallaa Vilaiyulum Thakkaarum Thaazhvilaach Chelvarum Servadhu Naadu." In the Prime Minister’s interpretation, a superior nation is one where the land is fertile, the people are high in knowledge and character, and wealth is abundant without compromising morality.

This definition of greatness shifts the metric from material landmarks and treasure to wisdom, justice, and human dignity, linking the current fiscal policy to a broader civilizational goal.

The timing of this budget is intrinsically linked to the 70th anniversary of Merdeka, which will be marked on August 31, 2027. The Prime Minister referenced the historic moment on August 31, 1957, when Tunku Abdul Rahman stood at Stadium Merdeka and proclaimed independence seven times. To honor this milestone, the budget includes specific provisions for the preservation of national heritage, notably mentioning the restoration of Stadium Merdeka by PNB.

Furthermore, entertainment duties are exempted for arts, culture, entertainment, and sports events held at Stadium Merdeka and Stadium Negara, signaling a state commitment to cultural vibrancy as a pillar of national identity.

The budget, totaling RM459.8 billion, addresses the first dimension of independence: freedom from daily financial pressure. The allocation for the Social Transformation and Assistance (STR) and Social Assistance and Relief (SARA) programs has increased to RM16 billion. Under this scheme, STR recipients will receive SARA payments of up to RM150 per month.

Additionally, up to 13 million citizens aged 18 and above, including the middle class, will receive the SARA MADANI payment of RM100 twice a year. These measures are designed to ensure that the benefits of economic growth are felt directly in the household, moving from the concept of being "cared for" to "enjoying welfare," a progression reflected in the evolving themes of the MADANI government’s National Day celebrations from 2023 to 2026.

Tax relief measures have also been significantly updated to address stagnant purchasing power. The individual tax exemption threshold, which had remained unchanged since 2010, has been raised from RM9,000 to RM12,000. This adjustment acknowledges that while prices have risen over the past 16 years, the tax relief had remained static. The tax rate for taxable income between RM70,000 and RM150,000 has been reduced by one percentage point.

The scope of tax deductions has been expanded to include children’s tuition and AI subscriptions, while the deduction for caring for parents and grandparents now covers all care expenses, not just health-related costs. SARA funds can now be utilized at 216 Pasar Tani and FAMA markets, allowing recipients to purchase fresh produce, thereby channeling government assistance directly to farmers and fishermen.

Agricultural incentives have been strengthened to honor the rural roots of the nation’s independence. The paddy harvest incentive has been doubled from RM50 to RM100 per hectare per season. The rubber production incentive has been increased for the third time since 2022, reaching RM3.30 per kilogram. A significant milestone for land tenure was highlighted, with 109,000 FELDA settlers now holding full land ownership titles.

The Prime Minister emphasized that a settler holding a title is more independent than one cultivating land under another’s name, aligning with Thiruvalluvar’s assertion that fertile land is the first condition of a superior state.

The funding for these expansive measures is partly derived from the realignment of fuel subsidies through the BUDI MADANI program. The Prime Minister stated that foreigners and large corporations no longer fill their tanks with petrol subsidized by Malaysian taxpayers, a decision he described as bold and rare among previous governments. However, the fiscal landscape remains complex.

The Middle East crisis has pushed fuel subsidies to RM40 billion, and the 2026 deficit is projected at 3.6 percent, slightly above the 3.5 percent target. Despite this, the government remains confident that the deficit will fall to 3.3 percent in 2027, even with tax and SST reductions. This confidence is bolstered by 2026 revenues exceeding the original budget by RM20.5 billion.

While higher oil prices increase petroleum revenues, providing a natural hedge, the Prime Minister acknowledged that a hedge is not independence, as external geopolitical shocks can still impact domestic stability.

The second dimension of independence focuses on the economic floor, addressing the disparity between national growth and worker income. The speech acknowledged that the cost of living burden stems not only from rising prices but from stagnant wages, with worker compensation accounting for only 33.9 percent of GDP. The minimum wage trajectory has been accelerated, moving from RM1,500 in 2022 to RM1,700 in 2025, and reaching RM2,000 by June 2027, affecting over four million workers.

A minimum wage of RM2,500 is introduced for semi-skilled jobs and graduates as a starting point, while government-linked investment companies (GLIC) and government-linked companies (GLC) have raised their living wage benchmark from RM3,100 to RM3,400.

Special provisions have been made for the gig economy, with a RM160 million package co-funded by the government and Grab. The matching incentive for PERKESO contributions has increased from 35 percent to 50 percent if platform companies also bear the contribution cost for workers. This approach aims to encourage corporate responsibility without immediate legislative mandates.

However, the Prime Minister noted that negotiating with a single giant reinforces its position, and the ultimate goal is a uniform minimum income rate and protection standard for all platforms, to be determined by the Gig Consultative Council in early 2027.

A forward-looking structural change involves the automatic registration of every citizen as an EPF member upon turning 18. This ensures that online sellers and delivery riders have a retirement account from their first day of work. The Prime Minister emphasized that an account without contributions is merely a number, and the true test lies in the amount deposited.

This measure aims to institutionalize retirement security for the informal sector, bridging the gap between traditional employment and the modern gig economy.

The budget’s narrative concludes with the assertion that cash assistance can alleviate hardship, but only a dignified wage can liberate. The 2027 budget is thus presented as a comprehensive effort to redefine independence, moving beyond political sovereignty to economic and social autonomy.

By linking fiscal policy to historical legacy and cultural values, the government seeks to establish a new baseline for national development, where the measure of success is not just GDP growth, but the tangible improvement in the dignity and security of every citizen.

The next step in this process is the implementation of these measures, with the Gig Consultative Council’s recommendations in early 2027 serving as a critical milestone in the broader journey toward a more equitable society.

Related: Grab · Datuk Seri Anwar Ibrahim · Dewan Rakyat