'Clueless, short-sighted': Ex-EPU man under Najib tears apart Anwar's latest budget

A member of the Economic Planning Unit under former prime minister Najib Razak has questioned the sudden introduction of a new category of top income earners in the 2025 budget, saying the government seems to be clueless on who will continue to enjoy the cheaper petrol when subsidy is abolished for the RON95 petrol next year.

Isham Jalil, the Umno leader who was sacked last year for criticising party boss Ahmad Zahid Hamidi, said even if Putrajaya wanted to decrease the number of Malaysians receiving subsidies, "T15" still denoted about five million people.

Previously, household incomes in Malaysia were divided into three categories, starting with 20% of the population (T20) who are in the top bracket, followed by the middle income earners (M40) and the low income earners B40.

The categories were used to guide policy makers in formulating economic policies and understanding socio-economic dynamics.

Six months after his appointment as the economy minister, Rafizi Ramli announced that the categories would be phased out as the government would focus on the net disposable income of households, as it prepares to remove decades-old subsidies that had kept the cost of goods low in Malaysia.

But it was Anwar who first hinted in his budget speech last week that T20 would be labelled as T15.

This was followed by Rafizi saying that the definition of T15 would also take into account variables such as household net income, place of residence, and household expenditure for a decent quality of life.

"Even experts in the government do not understand the definition of T15.

"If Rafizi wants to change the definition, five million people will still have to bear the higher cost," Isham said.

As at 2022, the Department of Statistics defines top income earners as those households with monthly income of RM13,295 and above.

Isham said these households cannot be labelled as "super rich", a term often used by Anwar to justify the abolition of bulk subsidies.

"If a husband and wife with four children earn RM7,000 each and live in the city, they can be categorised as urban poor," Isham said.

In the latest budget, the government introduced a series of new taxes while expanding the sales and services tax to include items it says are consumed by the rich, with Anwar giving avocado and salmon as examples.

Isham said the government seems intent on raising revenue without considering the long-term impact of the series of subsidy cuts.

"The government increases debt, cancels subsidies and introduces new taxes. Then it touts the budget as the biggest in history, even though it is a burden on the people. This is not sound economic management," he said.

He said the debt incurred under Anwar's government was as high as during the Covid-19 crisis four years ago.

Presenting the 2025 budget, Anwar said new debt had fallen from about RM100 billion to more than RM90 billion (2023), followed by an estimated RM85 billion (2024) and a projected RM80 billion (2025).

"Debt should have been reduced to pre-Covid-19 levels, i.e. around RM60 billion.  However, this is not the case as debt remains high even without Covid-19.

"Before 2018, the government's debt stood at RM600 billion but in just six years, it has risen to RM1.2 trillion, which is a two-fold increase. On top of that, Anwar has added almost RM200 billion within two years.

"At the same time, he has increased the price of oil and expanded SST," he said.