More cash, less pressure: 2026 Budget should lift incomes, not just lower prices
Inflation is low, so the issue is not rising prices, it is low income, says economist.
NURSYAHMINA ZAINAL
SHAH ALAM – With wages stagnant and household expenses climbing, many Malaysians are hoping the 2026 Budget will bring real relief.
For technician Muhammad Muammar Gaddafi, 35, the burden was clear.
He said when prices keep going up while wages stayed the same, it felt like the people were always running behind.
He added that fair wage adjustments in line with inflation and skills would give families like his more stability and security.
“Higher pay would also allow people to save, plan for their children’s education and handle emergencies without so much stress,” he told Sinar Daily.
Economists, however, noted that the solution may not lie solely in lowering prices, but in putting more cash directly into households’ hands.
Universiti Teknologi Mara’s Economics and Financial Studies Department senior lecturer Dr Mohamad Idham Md Razak said the government could expand targeted cash transfers, such as through the eKasih-linked Bantuan Wang Ihsan, to ease cost-of-living pressures without compromising fiscal sustainability.
He said broad-based subsidies like fuel could be gradually rationalised through mechanisms such as Budi Madani RON95 (Budi95).
“Introducing temporary tax relief for essential goods, enhancing public transport subsidies and supporting local food production through agro-tech grants can also cushion household budgets.
“These measures protect vulnerable groups while freeing up fiscal space for strategic investments,” he said, stressing that long-term resilience must come from structural reforms rather than short-term fixes.
Meanwhile, economist and policy specialist Dr Geoffrey Williams pointed out that the cost-of-living issue involved two elements: rising prices and low incomes, with the latter making higher prices less affordable for many.
“Inflation is low, so the issue is not rising prices. The issue is low income,” he said.
He suggested that the government could turn Sumbangan Tunai Rahmah (STR)-Sumbangan Asas Rahmah (SARA) into monthly RM100 payments to spread out the benefits.
The single most important reform in the 2026 Budget with the greatest long-term impact, he said would be a monthly RM100 Universal Basic Income.
“For an extra RM11 billion, it could create a Universal Basic Income of RM100 per month to ease the cost of living for everyone.
“This would raise incomes, open up opportunities and drive economic growth,” he said when contacted.
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