New budget could spark class war, says Syed Saddiq

BUDGET 2025 | Muar MP Syed Saddiq Syed Abdul Rahman has raised concerns that the newly tabled Budget 2025 could potentially spark a class divide.

While he commended the government's move to raise the threshold for welfare assistance, he expressed worry about the impact on the middle class, particularly those earning around RM7,000 a month.

“According to the budget, the government announced that the top 15 percent (T15) of Malaysians will no longer receive subsidies for petrol, education, and healthcare. But what does the top 15 percent mean?

“In Malaysia, the top 15 percent of households earn about RM12,000. However, based on data from the Department of Statistics Department, household income refers to the total income of all earners in a family, not individual income.

“So, if you're earning RM7,000 a month today, you will lose access to education and healthcare subsidies - not just for yourself, but for your family and children as well,” Syed Saddiq (above) explained to Malaysiakini.

With an average household of 3.8 people, Syed Saddiq highlighted that families with two working members earning a combined RM12,000 would be denied these crucial subsidies.

He urged the government to provide clearer guidelines on the matter, stressing that the current approach risks unfairly penalising the middle class.

“Based on the existing data, this policy could harm Malaysia's middle-income group. And with the Central Database Hub (Padu) still incomplete, I fear many will fall through the cracks of the system," he said.

Yesterday, Prime Minister Anwar Ibrahim, who is also the finance minister, presented the Budget 2025 themed "Madani Economy, Prosperous Nation, Well-being of the People".

On education subsidies, Anwar said the government plans to increase fees for children of the top 15 percent studying in government boarding schools like science institutes - referring to MRSM - as well as in public higher education institutions.

He said currently, 30 percent of students in these elite schools and public universities are from higher-income families.

The prime minister said the T15 will also have to pay extra for public healthcare.

Contradictions in sugar war

Syed Saddiq also criticised the government's contradictory stance on sugar.

While he welcomed the additional excise tax on sugary drinks as part of the fight against unhealthy consumption, he pointed out that the government continues subsidising two major sugar producers in Malaysia.

“These producers contribute significantly to the unhealthy sugar consumption in the country, which makes the policy seem contradictory. I hope the government can clarify its position,” he said.

Additionally, Syed Saddiq called for more substantial commitments to governance reform, urging the introduction of measures like mandatory asset declarations for ministers and MPs and the long-awaited political funding act.

“These are concrete steps that align with Anwar's vision of strengthening institutions and promoting integrity in Malaysia,” he concluded.

Lack of framework

Several Perikatan Nasional lawmakers have mixed opinions about the budget.

Putrajaya MP Mohd Radzi Md Jidin criticised the budget presentation, stating that while Anwar referenced economic data, there was no clear explanation of how the government plans to steer the country forward or the overarching economic framework or strategy.

"This lack of detail is especially concerning for external stakeholders like investors and market analysts, as several key components of Budget 2025 remain vague," he said.

"For example, the Sales and Services Tax (SST). It was mentioned that the SST will be increased and its scope expanded, but where are the specifics? If the government proposes a budget without details, how can we gauge the actual revenue it plans to collect from this expanded SST?" Radzi questioned.

He warned that the absence of clarity would leave industries uncertain about the government's direction, especially regarding SST taxation.

"Investors need certainty, and we cannot afford to leave them in the dark," he told the media.

The Bersatu vice-president emphasised that important governance issues should have been more thoroughly detailed in Budget 2025 rather than mentioned in broad terms.

“For instance, targeted petrol subsidies were referenced, but no explanation of how they would be implemented. Such critical information should have been included in the budget.

"The government cannot just make general statements - this is a budget. People expect clarity, and they want a budget that is comprehensive, understandable, and analyzable by all stakeholders," he stressed.

Several announcements not materialised

Tasek Gelugor MP Wan Saiful Wan Jan echoed Radzi's concerns, noting that several anticipated announcements did not materialise.

"We were waiting for significant announcements, but they never came. I hoped to hear more about opening the country’s economy to foreign investors and the incentives for domestic investors.

“That wasn’t made clear in the speech. Maybe it's in the accompanying documents, but we’ll have to review them first," Wan Saiful remarked.

However, he commended several initiatives Anwar unveiled that would benefit the people.

"I’m particularly interested in the incentives for families with autistic children. This has been a long-standing issue for these families, and the assistance provided is much needed," he said.

He also praised the continuation of the tax relief incentive for the National Education Savings Scheme (SSPN), a policy he championed as PTPTN chairperson.

"Alhamdulillah, I’m pleased to see this is continuing. It's a positive step," he added.

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