The Social and Economic Research Initiative calls for stronger M40 support, affordable childcare, better eldercare and clearer healthcare funding under Budget 2027.
SOCIAL and Economic Research Initiative (Seri) welcomes the Madani government’s Budget 2027, “Menggapai di Langit, Mengakar di Bumi”, as Malaysia navigates cost-of-living pressures.
However, staying rooted in the ground also means fixing the structural costs that decide whether households can live with security and dignity.
What we support
Targeted support for households: STR and Sara rose to RM16 billion from RM15 billion
Up to nine million STR recipients will receive up to RM1,800 annually while 13 million, including the M40, will get RM100 twice. Sara also covers fresh produce at Fama markets, benefitting households and small traders.
Dignity for doctors
More than 9,000 contract doctors will receive permanent posts in 2027, with future housemanship graduates also assured of permanent positions. This will restore job security and dignity while retaining them in public service.
Tax relief
Individual tax relief rises from RM9,000 to RM12,000, the first increase since 2010, while two tax brackets fall by one point. About 5.16 million taxpayers will pay less, with up to RM1,600 more in disposable income. Those earning RM80,000 in chargeable income could save RM640 annually. Relief also covers postnatal care and care expenses for parents and grandparents.
Young Malaysians
Young Malaysians face low starting pay, student debt, scant savings and high property prices. Budget 2027 offers a RM2,500 starting wage for graduates and semi-skilled workers, automatic EPF registration at 18, PTPTN deferment for low earners and RM20 billion in loan guarantees for 80,000 first-time homebuyers, giving them firmer ground to reach for the sky.
Moving forward
Further relief can ease today’s pressures but it will not change the structural costs behind household insecurity.
M40: Relief must go beyond tax
Tax relief varies by income and eligible spending while Sara’s RM200 annual aid offers little against rising living costs. M40 households risk falling between targeted aid and tax relief. Seri calls for support that directly addresses housing, childcare, education, healthcare and transport costs.
Women: Participation depends on care support
Women’s workforce participation depends on affordable childcare and eldercare. The Budget allocates RM100 million to train 6,000 childminders, RM20 million for childcare centres in government buildings and up to 98 days of maternity leave per birth for civil servants. However, coverage remains limited. Seri calls for affordable childcare, stronger return-to-work support and recognition of women’s unpaid care work.
Care economy: Greater investment required
As Malaysia ages, demand for care will rise, yet care work remains undervalued. The Budget cuts senior care service tax from 8% to 6%, exempts fees up to RM96,000 annually and raises the bedridden persons’ allowance to RM600. However, investment in care services and workers remains limited. Seri calls for sustained investment in affordable eldercare, community-based services and a better-supported workforce. Care is not just a household responsibility; it is economic infrastructure.
Healthcare: Link tobacco tax to public health
The Health Ministry’s allocation rises 2.58% to RM47.7 billion, slower than Budget 2026’s 2.8% increase. Malaysia also lacks a clear pathway to allocating 5% of government expenditure to healthcare. Seri has advocated a 5% tobacco tax increase to curb consumption and channel revenue into public health but none was announced. It calls for a clear pathway to the 5% target and transparency on how tobacco-tax revenue will fund public health.
Energy and climate: Clarify programmes and funding
The Budget includes energy efficiency and green financing measures but their links to last year’s initiatives remain unclear. Budget 2026 allocated RM20 million to the “Bijak Tenaga Madani” programme, including “Nur@Petra” rebates for domestic, industrial and commercial users. Budget 2027 highlights NUR Madani, offering up to RM200 for household air conditioners and refrigerators. Meanwhile, KWAP’s “Dana Iklim” was allocated RM2 billion for 2026 to 2030, while Budget 2027 announces RM1 billion for green projects.
Seri asks the government:
Why was “Bijak Tenaga Madani” absent from the Budget speech?
Is NUR Madani the same as Nur@Petra or is it its replacement?
Are industrial and commercial users excluded from the rebate because they can claim a 100% investment tax allowance for green technology until 2030? What support exists for firms without enough taxable income to use it?
Is the RM1 billion additional funding or part of the RM2 billion, and over what period will it be deployed?
Programmes only work if people know what exists, who runs it and whether it delivers.
Seri calls on the government to name a responsible agency for each energy and climate programme, publish clear funding and eligibility details and report progress regularly so that households, firms and Parliament can hold it to account. Budget 2027 responds to today’s pressures. It must also build stronger systems for tomorrow so that Malaysians can live, work and age with greater security, dignity and resilience.
Social and Economic Research Initiative