Malaysia delays decision on RM2,000 minimum wage until Budget 2027

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Malaysia delays RM2,000 minimum wage

Highlights

The government has postponed its decision on raising the minimum wage to RM2,000 until Budget 2027, taking into account the capacity of micro, small and medium-sized enterprises.
Economy Minister Akmal Nasrullah stressed that any minimum wage adjustment will consider differences among employer segments to maintain a balance between worker welfare and business sustainability.
The government has allocated RM127 million under Rolling Plan 1 of the 13th Malaysia Plan for the repair and maintenance of police quarters and police stations nationwide, including an additional RM5 million through a Notice of Change.

This article was translated from the original. Read the original version by our correspondent here.

Minimum wage considerations and employers' capacity

As reported by The Edge Malaysia, Economy Minister Akmal Nasrullah Mohd Nasir said the decision on a possible increase in the minimum wage to RM2,000 should be left to Prime Minister Datuk Seri Anwar Ibrahim's announcement when he presents Budget 2027.

He said the impact of any adjustment, particularly on micro, small and medium-sized enterprises, must be taken into account to ensure employers can absorb higher operating costs. According to him, the government is examining several employer segments so that implementation can strike a balance between safeguarding worker welfare and maintaining the sustainability of small businesses and micro, small and medium-sized enterprises.

Akmal made the remarks when asked to comment on economists' views that raising the minimum wage to RM2,000 could drive up prices of goods and services. He stressed that the government is taking differences among employer segments into account when considering any adjustment to the minimum wage rate.

Police facilities allocation and fiscal implications

In a separate development, Akmal said the federal government has allocated RM127 million under Rolling Plan 1 of the 13th Malaysia Plan for repair and maintenance works on police quarters and police stations nationwide.

He said the amount includes an additional RM5 million through a Notice of Change, raising the total allocation from RM122 million to RM127 million. Of the total, RM44.35 million has been allocated for the repair and maintenance of police stations, while RM77.65 million is for the repair and maintenance of 3,716 quarters nationwide.

For Kluang, RM3.7 million has been allocated, including for upgrading 10 blocks of quarters and repair works at Royal Malaysia Police premises under the administration of the Kluang District Police Headquarters. According to Akmal, the approach ensures development allocations are targeted at actual needs and improve public service delivery.

The artificial intelligence (AI) investment boom in the U.S. that we previously reported on is beginning to have a tangible impact on the cost of living, as demand for chips, hardware and electricity rises alongside data centre development. The article highlights how this demand pressure could add to inflationary pressures and complicate efforts to stabilise prices, while also raising employment concerns due to automation. From an investment perspective, the economic benefits are also flowing to the energy and infrastructure sectors that support the AI ecosystem.

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