Asean Summit to reinforce M'sia's role in steering strategic cooperation

The 46th Asean Summit, which enters its final day today, builds on the positive momentum achieved yesterday and is expected to further strengthen Malaysia's role in spearheading Asean's strategic cooperation agenda with regional and global partners.
Prime Minister Anwar Ibrahim's senior press secretary Tunku Nashrul Abaidah said Malaysia remains committed to ensuring that its tenure as Asean chair this year delivers meaningful, principled, and impactful outcomes for the people of Asean, especially through the key sessions taking place.

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Focus Malaysia

2 hours ago

• Focus Malaysia

Social protection programmes key to poverty reduction

MALAYSIA has stepped up efforts to reduce poverty in recent years through targeted social protection programmes, particularly those aimed at the B40 income category. However, the effectiveness and breadth of these programmes are called into question since growing living expenses continue to strain all income levels, including M40. The B40 in Malaysia's social protection environment Targeted assistance for the Bottom 40% (B40) income group is the central tenet of Malaysia's approach to reducing poverty. Programmes like Bantuan Sara Hidup (BSH), Bantuan Prihatin Rakyat (BPR), and the more recent measures unveiled in Budget 2025 aim to help low-income households cope with the rising cost of living. These initiatives provide needy families short-term financial relief through subsidies, housing assistance and cash help. The Department of Statistics Malaysia (DOSM) statistics, however, show that although these programmes provide short-term respite, they cannot significantly improve families' long-term economic standing. A recent report from DOSM states that the average income of B40 has increased by only 1.5% per year, which is not enough to keep up with inflation. Many people still have limited purchasing power as a result, particularly given the sharp increase in the price of food and housing. As such, Prime Minister Datuk Seri Anwar Ibrahim has underlined the government's will to address these problems, promising to lower costs and increase accessibility to necessities to ease financial burdens. Critics contend that monetary distributions could not alleviate underlying economic inequities despite these guarantees. 'Malaysia's B40 will continue to face an uphill struggle against poverty without structural reforms in education, employment, and wage policies,' one economist noted. Global social protection models: Achievements and insights for Malaysia Various social protection regimes worldwide have successfully reduced poverty, particularly when multifaceted and sustainable approaches are used. One programme generally commended for decreasing severe poverty is Brazil's Bolsa Família, which goes beyond cash transfers by requiring families to comply with health and education standards. This strategy has broken the cycle of inter-generational poverty, which has had a profoundly positive effect. Another practical example is the Basic Livelihood Security Program (BLSP) in South Korea, which combines financial help with housing assistance, skill development, and job support. By linking financial aid to social services and job training, the BLSP has decreased poverty rates and enhanced recipients' capacity to find steady work, encouraging long-term independence. South Korea's strategy emphasises the necessity of a comprehensive social safety net that fosters employment and skill development. Similarly, the European Union's 'Active Inclusion' approach supports beneficiaries by combining labour market reforms with social protection, offering financial assistance and work placements. Malaysian approach gaps: Going beyond financial aid Though Malaysia's B40 initiatives offer much-needed financial assistance, they don't have the same cohesive structure as nations like Brazil and South Korea. Due to the lack of a multifaceted strategy, B40 beneficiaries' ability to achieve economic independence is restricted. The main drawback is that Malaysia's social security system primarily uses short-term financial assistance to combat poverty rather than focusing on long-term empowerment initiatives. On the other hand, effective schemes, such as the BLSP in South Korea, strongly emphasise developing human capital, providing work opportunities and skill training to recipients as part of their social benefits. Another gap is the availability of affordable housing. Although Malaysian authorities have started projects to provide inexpensive housing, they are frequently focused in metropolitan areas where demand outpaces supply, underserving rural and peri-urban locations. Future directions for Malaysia: Establishing a Comprehensive social safety system Motivated by South Kore's BLSP and Brazil's Bolsa Família, Malaysia might benefit from implementing a more all-encompassing strategy that incorporates job assistance and skill development to improve the efficacy of social security. Working with social services and career development programmes might pave the way for the B40 to become resilient and financially independent. Furthermore, prioritising accessible education and universal healthcare will guarantee that fundamental necessities are satisfied, lessening the financial burden on low-income households. These steps would align with international best practices, calling governments to establish safety nets that do more than alleviate acute misery. Finally, increasing social protection in underprivileged regions might improve living conditions for low-income people in rural and urban areas, addressing regional disparity concerns. When Malaysia prepares for Budget 2025, adding these components might turn the B40 support system into a cornerstone for long-term, sustainable poverty alleviation. Using holistic reform to close the gap A move towards a more integrated strategy might enhance results for the B40 and beyond as Malaysia's social protection programmes continue to develop. As demonstrated by international examples, providing routes to education, work, and self-sufficiency is necessary to reduce poverty effectively. If these all-inclusive models are emulated, all Malaysians might gain from the country's progress, which could help Malaysia close the gap in economic inequality. ‒ June 20, 2025 The author is the Director of the Ungku Aziz Centre for Development Studies, Universiti Malaya. The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia. Main image: Bernama

New Straits Times

2 hours ago

• New Straits Times

PM: We're cutting debt gradually to keep investors' trust [WATCH]

PUTRAJAYA: The government is committed to gradually reducing the national debt while safeguarding economic growth and maintaining investor confidence, said Prime Minister Anwar Ibrahim. In his address at the Finance Ministry's monthly assembly, Anwar said efforts had been ongoing to reduce the fiscal deficit from 5.5 per cent in 2022 to a projected 3.8 per cent this year. "Some people ask why we must reduce it so sharply — why not just channel more to the people? "But if we don't, we lose trust from investors, and trust is critical. Leadership and economic stewardship require making policies we genuinely believe in. "With trust comes the ability to solve wider issues — from revenue generation and job creation, to overall economic development," he said. Anwar, who is also the finance minister, rejected claims that the government's focus on reducing debt came at the expense of the people's welfare, saying it was part of a long‑term strategy that required prudent and measured management. He said the total national debt had decreased from RM100 billion in 2022 to RM90 billion in 2023, RM85 billion in 2024, and was expected to drop to RM80 billion this year. "Since we came into office in 2022, we have reduced the debt by RM20 billion," he said. Anwar added that resolving the national debt could not be done hastily, and required patience and a gradual approach. "It's like when a son inherits a company after his father's death and finds RM50,000 in debts. He can't wipe it out in a year — it has to be resolved step by step," he said. In March, Finance Minister II Datuk Seri Amir Hamzah Azizan announced the government's commitment to reducing the fiscal deficit to 3.8 per cent in 2025, in line with its long‑term goal of bringing it down gradually and consistently — from 5.5 per cent in 2022, to five per cent in 2023, and 4.1 per cent last year. He said this approach would also slow the rise in total debt by reducing new borrowings each year — from nearly RM100 billion in 2022, to RM92.6 billion in 2023, and roughly RM77 billion last year.

Focus Malaysia

3 hours ago

• Focus Malaysia

Anwar: Time not right for GST re-implementation because rakyat's income still low

THE Goods and Services Tax (GST) is an efficient and transparent taxation system, but it is not yet suitable for re-implementation because the rakyat's income threshold is still low, said Prime Minister Datuk Seri Anwar Ibrahim. Anwar, who is also the Finance Minister, said the government did not completely reject the proposal to re-implement the GST, but the ability of low-income people must be taken into account first because the taxation system has a comprehensive impact. 'We postponed (GST) because the income of the people was still too low. My opinion at the time was that people with an income of RM2,000 were still affected although we gave some exemptions. 'Sugar and rice are not affected, but when people buy other goods or ride the bus, indirectly GST (is imposed) meaning it is comprehensive,' he said during the Finance Ministry's monthly assembly on Friday (June 20). Anwar said the government believes that the re-implementation of GST should only be considered when the average income of the people has increased to a more reasonable level of at least RM4,000 a month. 'Let the people's income increase first, let's say the minimum salary is RM4,000 (a month), maybe at that time we can (implement it). 'Right now, there are people earning RM1,700 or RM2,000… Maybe I was not wise in making this decision, but my intention is not to introduce taxes that will have a detrimental effect on the lower-class people, that's all,' he said. Based on this view, Anwar said the government chose to implement a more targeted Sales and Service Tax (SST) from which the revenue would be used to increase allocations to key sectors of the country such as education and health. 'So this is our reason, we are taking this tax to return it to the people. The allocation for the Education Ministry from RM58 bil in 2024 has increased to RM64 bil this year. 'Similarly, for the Health Ministry, RM41 bil last year, we are adding RM4 bil a year (making it) RM45 bil,' he said, stressing that the government's priority now is to strengthen critical sectors and ensure transparent and effective management. Anwar stressed that any national fiscal policy decisions, including tax implementation, must be viewed from a macro perspective and not just short-term effects. At the same time, he acknowledged the government's weakness in terms of policy communication to the people, thus he called on all parties to provide more active explanations about the policies implemented to avoid confusion and baseless accusations. 'I hope my friends (in the government) will please explain. Sometimes we are defensive, we just let people attack and we don't respond… Indeed, our weakness is also in explaining (policies) because we assume everyone understands,' he said. GST was first introduced in Malaysia on April 1, 2015 as part of fiscal reforms to replace SST with an initial rate of 6 per cent imposed across the board on almost all goods and services except those exempted. However, GST has received widespread criticism from various sections of society for allegedly burdening consumers, especially the low-income group. The tax system was officially abolished on Sept 1, 2018 and replaced with SST. On June 9, the government announced that it would implement a targeted review of the Sales Tax rate and expansion of the scope of the Service Tax effective July 1 in line with strengthening the country's fiscal position by increasing revenue and broadening the tax base without burdening the people the most. The Sales Tax rate remains unchanged for essential goods while a rate of either five or 10% will be imposed on non-essential or discretionary goods. ‒ June 20, 2025 Main image: Reuters/Liesa Johannssen