BUDGET2021: Everything You Should Know

As Malaysia faces the third wave of COVID-19, Budget 2021 is of utmost importance. The budget will determine how Malaysia will face the repercussion of pandemic. After deferring the tabling of Budget 2021 from October 2nd, finance minister Tengku Zafrul Aziz finally announced Malaysia’s 2021 Budget in parliament on the 6th of November. It was reported that the total expenditure will be projected at RM322.5 billion next year which is RM8 billion more than the 2020 Budget. Here, are some highlights of the announced budget:

  •  1% decrease in income tax for Malaysians in the M40 household groups earning between RM4,361 and RM9,619 monthly.
  •  B40 household groups earning less than RM4,360 monthly will receive RM50 vouchers through the Baucar Perlindungan Tenang insurance program, which can be used to purchase Perlindungan Tenang products such as Takaful life and personal accident insurance.
  • Sabah and Sarawak will receive development expenditure allocation of RM5.1 billion and RM4.5 billion respectively.
  • RM2.7 billion allocated to rural infrastructure projects, including works for road construction, water supply, electricity supply, building of new houses, and construction of lamp posts. 
  • Youths aged between 18 – 20 years old to receive a one-off RM50 e-wallet credit.
  • Those made jobless can apply to withdraw RM500 a month from their EPF Account 1 savings or a maximum of RM6,000 spread out over 12 months, starting January 2021.
  • RM1.5 billion allocated to ensure internet connectivity for Malaysians in the B40 group, assistance to be provided in the form of credit of RM180 per person.
  • 100,000 frontliners will receive a one-off payment of RM500 as a token of gratitude for their hard work.
  • Aid for OKU(disabled person) will be increased from RM250 to RM300\
  • Increase of tax exemption for medical treatment and health screenings.
  • A RM31mil decrease for mental health and financial services from RM344mil in 2020 to RM313mil in 2021.
  • RM1 billion will be allocated to curb the 3rd COVID-19 wave in Malaysia

Criticism On The Allocation Of Budget 2021:

Despite allocating aid for Covid-19 frontliners, tax reliefs , aid for job-seekers and incentives for youths, government has allocated large sum of money for JASA. During the budget discussion in Parliament several members of Parliament criticised the allocation of RM85.5 million to revive the government’s public relations arm, the Special Affairs Department (JASA). This is because the opposition believes that JASA is a propaganda tool by the Perikatan Nasional (PN)  government, led by Prime Minister Muhyiddin Yassin, to promote partisan messages. Furthermore, ex-Minister of Youth and Sports, Syed Saddiq Abdul Rahman urged the government to impose windfall taxes on companies who have made extraordinary profits during the pandemic, specifically pointing out Top Glove’s RM1.9 billion profit for the 2020 financial year. He claimed a windfall tax on glove makers could gain the government RM4.8 billion in revenue that can be used to benefit Malaysians, especially those on the front lines.

Since it came into power the Perikatan Nasional government has been quite unstable. Due to this there are speculations that Prime Minister might face vote of no confidence and Budget 2021 will not get passed. So then what happens?

What happens if Budget 2021 doesn’t get passed?

If the Parliament, fails to pass Budget 2021, it will mean that there is a vote of no confidence in the government. This also means that the government may have issues in carrying out the administration of the country. Eventually leading to the occurrence of four possible consequences. Firstly, the resignation of the Prime Minister,after this the YDPA(the king) will have to form a new government to table a new budget. Secondly, the Prime Minister can request to dissolve Parliament, then a new government is installed and a new budget is then subsequently tabled. Thirdly, if the Prime Ministers request to dissolve Parliament is successful a General Election will ensue.

However, industry expert and National Budget Office director Johan Mahmood Merican said, “the country cannot afford to risk the continuous efforts to address the pandemic if Budget 2021 is not approved by the Parliament. It is crucial for Budget 2021 to be implemented to ensure continuity in the war against COVID-19, as well as to ensure a smooth economic recovery for the sake of the people’s well-being,”

With that being said, Malaysians will see whether the RM322.5 billion bill passes the first round of votes by the Members of Parliament in the Dewan Rakyat on the 25th of November. Eight days have been allotted for MPs to debate it at policy level, and another 11 days at the committee level. If Budget 2021 survives this Nov 25, it will still need to be voted on at the end of debates at the committee stage on Dec 15 before it can be finally passed.

Budges 2021 comes at a very challenging time and it is very critical that government should implement all its promises. Government should use all its resources to help the citizens to overcome the pandemic.

Written by: Narmatha Raja


  • MalayMail:



  • BFM Station:


  • Bernama News: