The upward revision of the minimum wage and full enforcement of the Progressive Wage Policy in 2025 signals the government’s commitment to incremental wage and labour markets reforms [see section 6]. [...] Estimating the government’s total allocation for the environment and climate sector is difficult because of the cross-cutting nature of these issues and the absence of climate or environment budget tagging in Malaysia. [...] The government has also expanded the Community Rangers Programme to combat poaching and illegal activities in forested areas by increasing the number of rangers to 2,500 under the Biodiversity Protection and Patrolling Programme and Smart Patrol initiative. [...] The cross-cutting nature of the energy transition, illustrated by the overlap in the roles and distribution of budget funds to PETRA and KE, spotlights the importance of alignment throughout all levels of implementation. [...] The National Committee for Energy Transition and National Energy Council play a crucial role in coordinating a whole-of-nation approach to realise the goals of NETR, not just between the ministries responsible for energy and the economy, but also across the broad spectrum of stakeholders from other ministries, government agencies, regulators, industry players, civil society and the public.
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Table of Contents
- Economics Trade and Regional Integration Calvin Cheng Hanson Chong Jaideep Singh and Qarrem Kassim 1
- Climate Environment and Energy Ahmad Afandi Dhana Raj Markandu Kieran Li Nair and Zayana Zaikariah 1
- Institute of Strategic International Studies ISIS Malaysia 1
- October 2024 1
- About ISIS Malaysia 2
- About the contributors 3
- Foreword 4
- Snapshot 5
- 1. Overview of Budget 2025 7
- Fig. 1. Breakdown of revenue expenditure and borrowing 8
- Fig. 2. Breakdown of development expenditure by sector 8
- 2. Fiscal policy and new tax measures 9
- Fiscal consolidation and expenditure 9
- Fig. 3. Fiscal consolidation increasingly driven by GDP expansion 10
- Fig. 4. Spending increases in 2025 solely coming from opex 10
- Revenue and taxation 10
- Fig. 5. Government revenue has been increasing steadily 11
- Fig. 6. But pace of growth will not reverse 4-decade decline in revenue-to-GDP 11
- 3. Subsidies and social transfers 12
- Targeted subsidies and RON95 12
- Cash transfers and social assistance 13
- Fig. 7. STR unchanged additions come from expansion of SARA cash-like vouchers 14
- Fig. 8. New SARA expansions create even larger cliffs at the poverty line threshold 14
- Social protection 14
- 4. Industrial development and competitiveness 15
- Fig. 9. MITIs opex hits record high under Budget 2025 17
- Fig. 10. MITI is a key beneficiary of one-off funding for the ASEAN chairmanship 17
- 5. MSMEs entrepreneurship and innovation 17
- 6. Work education and training 19
- Work and labour markets 19
- Education and training 20
- Fig. 11. Pupils from poorer households have lowest school readiness 20
- Fig. 12. Teacher quality lags regional peers 20
- Fig. 13. Budget 2025 sees largest ever allocation for TVET 21
- Fig. 14. Need to expand high-skilled TVET education 21
- 7. Climate energy and environment 21
- Introduction and overview 21
- Fig. 15. Disaster-risk management makes up bulk of the allocation for key environmental and climate-related initiatives under Budget 2025 22
- Fig. 16. Annual allocation for the environmental and climate ministries has increased steadily since 2021 and increasingly dominated by development expenditure 23
- Environmental and natural resources management 24
- Biodiversity conservation 24
- Fig. 17. Increase in EFT since its introduction to incentivise conservation at the state level 25
- Environmental and river protection 26
- Sustainable agriculture and commodity 27
- Energy transition and low carbon development 27
- Disaster-risk management and climate adaptation 30
- Appendix A 33
- Appendix B 34
- Appendix C 35
- Appendix D 36
