Anwar cuts a deal with opposition to clear a 2027 budget hurdle

MALAYSIA’S 2027 budget cleared its first major parliamentary hurdle after Prime Minister Anwar Ibrahim’s government struck a pact with several opposition and independent lawmakers, securing their support for the spending plan in exchange for constituency development funds.

Anwar earlier this month presented the spending plan, potentially the last before he calls a general election, that hikes the minimum wage, expands tax relief for the middle class and pledges to ease cost-of-living pressures.   

The budget passed the policy stage during a vote in parliament on Thursday (Oct 29), paving the way for lawmakers to further debate it before a final vote. A defeat could potentially have forced the premier to resign or seek a dissolution of parliament, triggering a snap election.

Several opposition parties and lawmakers, including Parti Pribumi Bersatu Malaysia, or Bersatu, backed the budget after signing an agreement with the government, Anwar said on social media before Thursday’s parliamentary vote.

The opposition lawmakers offered their support in return for development funds from the government, Bersatu said in a social media post. 

Bersatu said the agreement also includes conditions for the government to enact key institutional reforms, including limiting the prime minister’s maximum time in office to 10 years, or two terms, and separating the roles of the attorney general and public prosecutor.  

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Anwar, whose Pakatan Harapan coalition has suffered setbacks in a succession of state elections, is trying to court voters and deliver fast economic growth while limiting deficits.

The 79-year-old first-term premier is said to be considering calling nationwide polls in the second half of next year, ahead of the February 2028 deadline. BLOOMBERG