Budget 2027 To Boost Income, Productivity – CGS International

KUALA LUMPUR, Oct 15 (Bernama) -- Budget 2027 is expected to support income growth as the government presses ahead with efforts to raise wages through a tiered minimum wage structure covering semi-skilled workers and graduates, CGS International Securities Malaysia Sdn Bhd said.

The integrated financial services provider said a higher personal income tax threshold would also boost disposable income.

Meanwhile, allocations for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) cash assistance have been increased to RM16 billion from RM15 billion in 2026, with coverage expanded to include more low-income and vulnerable households.

The measures are complemented by two RM100 cash transfers for non-STR recipients and a one-off RM1,500 payment to civil servants.

“While Budget 2027 may be interpreted as election-friendly, we see measures addressing lingering issues related to consumption, wages and productivity.

“We think Budget 2027 signals a stronger push to raise productivity,” the brokerage firm said in its economic update note.

For corporations, CGS International said the measures include incentives for companies investing in machinery, information and communications technology and automation.

“Small and medium enterprises will benefit from extended accelerated capital allowances, artificial intelligence adoption grants and easier access to financing,” it said.

The government also aims to boost labour productivity through an RM8 billion allocation for technical and vocational education and training, three million training opportunities through the Human Resource Development Corporation, and initiatives to reduce reliance on low-skilled foreign labour.

However, details of several proposed reforms remain unclear, including the lack of guidance on the proposed carbon tax and a definitive timeline for institutional reforms, such as limiting the prime minister’s tenure to two terms and separating powers.

Clarity is also lacking on several reform priorities under the 13th Malaysia Plan, including the proposed multi-tier foreign worker levy, details of the existing Progressive Wage Policy and potential changes to the retirement age.

-- BERNAMA