Prime Minister Najib Abdul Razak's family holiday in Australia shows a detachment from the realities of life that ordinary Malaysians face, an Amanah MP says.

The people struggled with rising cost of living and monsoon floods while Najib and his family were having a "lavish holiday", Kuala Terengganu MP Raja Kamarul Bahrin Shah Raja Ahmad said last night.

"The people realise 2017 will bring more challenges and hardship, but the government is staying in the clouds, without facing reality," he said in a statement.