SHAH ALAM - The government is expected to introduce initiatives in Budget 2025 aimed at alleviating the increasing cost of living faced by the M40 group.
Universiti Putra Malaysia economist Associate Professor Dr Ahmed Razman Abdul Latiff said while inflation rate was currently under control, there will likely be a continued rationalisation of certain goods, particularly RON95 petrol.
As part of this, he said the government was expected to enhance the Sumbangan Tunai Rahmah mechanism, utilising the Central Database Hub (Padu) to extend financial assistance beyond the B40 group.
"This could allow certain M40 households, especially those in urban areas juggling daily work commitments along with large families or dependents, to qualify for support," he told Sinar Daily.
Razman said the government's price control measures on essential goods and services were likely to be extended, ensuring that the M40 group continued to benefit from stable prices on basic necessities.
In addition to financial assistance, he said the government may also focus on initiatives aimed at increasing disposable income for M40 households.
"This could include providing training for upskilling and reskilling, potentially increasing the minimum wage and introducing a progressive wage system to better support these families in the long term," he said.
Meanwhile, regarding the tax adjustments in Budget 2025, Razman said he did not foresee new or higher tax rates being imposed on the M40 or T20 groups.
He said based on experience, the introduction of new taxes affecting them seemed unlikely, although there could be some amendments or adjustments, particularly concerning capital gains tax, inheritance tax or luxury goods tax.
He said for the M40 group, he doubted there would be significant tax hikes and while tax relief was possible, it likely would not be drastic.
"Any relief would probably target specific segments of the M40 group rather than applying to the entire group, as the government still needs to maintain tax revenue," he said.
On the government's overall economic strategy to alleviate financial pressure on the M40 group, Razman said he observed that this year's initiatives have shown positive outcomes across various macroeconomic indicators.
These included growth opportunities, export volumes, the producer price index, low unemployment rates, low inflation, a strengthening Malaysian Ringgit and a recovering stock exchange, he added.
He said while the median salary has increased, providing some relief for the M40 group, it was crucial to implement additional measures in the upcoming Budget 2025 to ensure a more sustainable solution rather than just a short-term fix.
Budget 2025, the third under the unity government, will be tabled in Parliament on Oct 18.