Malaysia unveils US$80 billion biggest ever budget in feel-good boost to post-Covid recovery

Finance Minister Tengku Zafrul unveils first budget under PM Ismail Sabri Yaakob with wide-ranging plan including cash for low-income workers; subsidies for food, fuel and firms hiring women; and aid for small businesses

Opposition criticism muted following peace pact, but some analysts warn benefits may be too widely spread to ‘jump-start’ the economy

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Malaysian Finance Minister Tengku Zafrul Abdul Aziz holds a briefcase containing the 2022 Budget as he leaves the Finance Ministry to head to Parliament House in Putrajaya. Photo: EPA

Published: 9:34pm, 29 Oct 2021Updated: 11:00pm, 29 Oct 2021

Malaysia on Friday unveiled its biggest ever budget with Finance Minister Tengku Zafrul Abdul Aziz indicating the government was well aware that businesses and residents required continued state aid with the battle against Covid-19 “still raging”.

Analysts said the large spread of beneficiaries across social groups under the spending plan showed the government was seeking to boost a rising nationwide “feel good” factor as the economy – roiled for months – picks up following a phased reopening.

The wide-ranging plan includes cash aid for those on low incomes, subsidies for basic food and fuel items, aid for small and medium enterprises, and wage subsidies for companies hiring more women, the disabled and members of the indigenous Orang Asli community.

The new 332.1 billion ringgit (US$80.2 billion) budget is the first by the government of Prime Minister Ismail Sabri Yaakob, who in August became the country’s third prime minister in two years following a protracted tussle among the political elite.

With widespread dissatisfaction among the public and Malaysia’s influential royals over the pandemic-time politicking, Ismail Sabri signed an unprecedented peace pact with the opposition soon after taking power – with an aim of bringing about medium-term stability to see the country out of the crisis that has so far caused the deaths of 28,000 residents.