Bersama’s budget proposal is a breath of fresh air

Bersama’s shadow budget for 2027 breaks the cycle of the usual short-term financial firefighting patching over structural cracks with temporary cash handouts.

In it, former economy minister Rafizi Ramli and Bersama’s economics lead Sum Dek Joe present a pragmatic, 10-year path to a balanced budget and a “generational new deal”.

The economic foundations project 2026 gross domestic product (GDP) growth at 5.2% with a fiscal deficit of 3.5% of GDP and federal debt at 64.9% of GDP and economic growth at 4.0-5.0% for next year.

Importantly, it aims to reduce the fiscal deficit to 1.8% and federal debt to 56.4% of GDP by 2031 and achieve a federal budget surplus by 2035. For a conservative like me this is music to my ears.

Bersama couples this fiscal discipline with direct, institutional social security reform which channels fiscal gains directly into incomes and is universal in scope.

It rightly identifies that Malaysia’s key revenue constraint is the narrow tax base. While Bersama proposes replacing the SST with a 5% GST, its most forward-thinking idea is the retail electronic payment tax (REPT), an idea that I have long advocated.

With digital transactions expanding rapidly, Bersama’s plan is to introduce a tiny 0.5% levy on retail electronic payments starting in 2030.

Projected to generate RM9.1 billion annually from an estimated RM1.82 trillion digital base, REPT offers a dynamic, passive way to broaden the tax base without squeezing household incomes.

Bersama accompanies tax reform with tax-earmarking. By reforming the Federal Constitution, specific revenues can be ring-fenced for key public needs.

So, 100% of tobacco excise duties of around RM3 billion will be directly earmarked for the public health sector, establishing a direct, transparent link between vice taxes and healthcare funding.

The centrepiece of Bersama’s plan is replacing wasteful bulk fuel subsidies with institutionalised social safety nets.

By floating fuel prices at market rates, the government saves RM19.9 billion annually in funds that are directly redistributed to families.

Other Bersama budget proposals include:

• Universal child allowance of RM50 per month for every child under 18 (up to RM250 per household), benefiting 8.3 million children.
• Universal cost of living allowance of a fixed, inflation-indexed RM200 per month for B60 households.
• Universal basic pension in two tiers providing RM600 per month for over 60s without EPF or public pensions, alongside top-up payouts for those with low savings.

To ensure this shift is sustainable, Bersama introduces structural checks across the economy.

The independent public finance commission (PFC), also an idea I have championed, will serve as a constitutional fiscal watchdog protected from political interference.

The PFC will independently audit budget assumptions, verify mega-procurements, and evaluate electoral manifestos to stop governments from transferring debt to future generations.

Rafizi’s progressive wage policy (PWP) will be scaled up to RM1.8 billion covering 2.5 million low-to-mid wage workers, breaking Malaysia’s wage compression trap, another step towards a universal basic income (UBI).

The main strength of Bersama’s proposals lies in the net financial impact. Critics often claim that cutting fuel subsidies hurts ordinary people. Bersama disproves this with hard numbers.

For the average B40 family, gaining RM582 in targeted allowances far outweighs losing RM215 in bulk subsidies and old grants, giving a net gain of RM367 per month (11.2% more in disposable income).

Median and M40 households get net monthly gains of RM557 and RM539 respectively, primarily boosted by the institutionalisation of senior social pensions.

Belanjawan Bayangan Kancil 2027 offers a realistic, courageous blueprint.

By taxing smarter, spending transparently and protecting citizens directly, it proves that fiscal responsibility and social justice go hand in hand.

Anwar Ibrahim would do well to take notes because this is a policy agenda that could win votes.

The views expressed are those of the writer and do not necessarily reflect those of FMT.

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