Malaysia PM announces cash handout for all adult citizen, Govt offering much-needed relief measures to ease living cost of rakyat

 

 

KUALA LUMPUR — Malaysia’s Prime Minister (PM) Anwar Ibrahim on Wednesday announced new measures to address growing public disquiet about the rising cost of living, including a cash handout for all adult citizens and a promise to lower fuel prices.

The announcement came ahead of a planned protest to be held in Malaysia’s capital Kuala Lumpur on Saturday, calling for Anwar to step down over escalating prices and a failure to deliver on promised reforms, among other concerns.

Anwar’s administration has carried out a number of measures to boost revenue and productivity this year, including a minimum wage hike, increased electricity tariffs on heavy power users, and new sales taxes on some imported fruits and luxury goods.

Anwar has said the moves were mainly targeted at large businesses and the wealthy, but critics have voiced fears that higher costs would eventually be passed down to consumers, including lower and middle income earners.

On Wednesday, Anwar said all adult Malaysians above 18 years old will receive a 100 ringgit ($23.67) one-off cash aid to be disbursed from Aug. 31.

The government will spend a total 15 billion ringgit ($3.55 billion) in cash aid in 2025, up from 13 billion ringgit originally allocated for the year, he said.

Police have said they expect between 10,000 and 15,000 people to attend the Saturday protest, which has been organized by opposition parties.

“I acknowledge the complaints and accept that the cost of living remains a challenge that must be addressed, even though we have announced various measures thus far,” Anwar said.

He added that further initiatives to aid those in poverty will be launched on Thursday.

Anwar said the government will also announce details on a long-awaited plan to remove blanket subsidies on the widely used RON95 transport fuel before the end of September.

Once the subsidy changes are implemented, Malaysians will see fuel prices at the pump drop to 1.99 ringgit per liter, compared to the current price of 2.05 ringgit, Anwar said.

Foreign nationals however will have to pay unsubsidized market prices for the fuel, he added.

Anwar also announced additional allocations for a government program aimed at increasing access to affordable goods and necessities, and vowed to improve other existing aid measures.

Malaysia has seen inflation fall this year, but worries persist over increasing prices of basic necessities like food.

Data released this week showed consumer prices rising 1.1% from a year earlier last month, but the costs of food and beverages were up at a faster pace of 2.1%.

Govt offering much-needed relief measures to ease living cost of rakyat

PETALING JAYA: Malaysians can look forward to a series of measures aimed at easing cost of living, including a one-off RM100 cash aid for those 18 years and above, and cheaper RON95 soon.

The cash assistance will be credited directly into their MyKad under the Sumbangan Asas Rahmah (Sara) initiative.

Prime Minister Datuk Seri Anwar Ibrahim announced these measures in a special announcement aired live on his social media platforms yesterday.

Offered in conjunction with National Day on Aug 31, he said the incentives were aimed at easing the rising cost of living and a token of appreciation for the people.

“With this announcement, the combined allocation for Sumbangan Tunai Rahmah (STR) and Sara rises from RM13bil to RM15bil this year, marking the first time in history that cash aid is extended to all adult Malaysians,” he said.

Anwar, who is also Finance Minister, said this initiative would benefit 22 million Malaysians with an allocation of RM2bil.

This assistance, said Anwar, can be used from Aug 31 to Dec 31 this year, to buy essentials at over 4,100 outlets nationwide, including major supermarkets such as Mydin, Lotus’s, Econsave, 99Speedmart and participating grocers.

“It will be distributed on individual basis, not by household. So, for example, a household with a husband, wife and two adult children will receive a total of RM400,” he said.

Less is more: The price of RON95 petrol will soon be reduced to RM1.99 per litre under a targeted subsidy scheme with further details to be announced by the end of September. — IZZRAFIQ ALIAS/The Star

Anwar said the cost of living remained a pressing challenge that must be addressed wisely and urgently.

He added that while overall inflation in June 2025 dropped to 1.1%, the lowest in 52 months, food and beverage prices continued to rise above the national average.

“There may be some among us who are financially secure and do not need this aid. The government intends to reallocate any unspent funds by year-end towards assistance programmes for vulnerable groups next year,” he added.

In a separate statement, the Finance Ministry said collectively, households have the potential to receive a higher amount of Sara credit.

“For example, a family comprising a husband, wife, and two children aged 18 and above would receive a total of RM400, instead of just RM100,” it said.

The Sara credit can be used to buy over 90,000 essential items across 14 categories, including rice, egg, household cleaning products, medicine and school supplies.

“The RM100 credit is valid until its expiry date of Dec 31, 2025.

“Any unspent balance will be redistributed to vulnerable groups through a programme to be determined later,” said the ministry.

Sara complemented the Sumbangan Tunai Rahmah (STR) initiative, which provided monthly credits specifically for purchasing basic necessities, it added.

The initiative was introduced by the government in its first Madani Budget in 2023 and currently benefits 5.4 million active recipients.

“Both initiatives are a token of appreciation from the government to all Malaysians who continue to support the nation’s fiscal reform agenda.

“They also reflect the Madani government’s commitment to redistributing the nation’s growing wealth, a result of bold fiscal reforms and more efficient economic management, guided by the Madani Economic Framework.

Anwar also highlighted that the Jualan Rahmah Madani initiative will be enhanced to assist the public in managing living costs.

The government, he added, will double the initiative’s allocation from RM300mil to RM600mil.

This funding will increase the frequency and expand the Jualan Rahmah Madani to include all 600 state constituencies nationwide, said Anwar, who is also Finance Minister.

“The additional allocation will, among others, increase the frequency and expand the number of locations nationwide, covering all 600 state constituencies,” he said.

Anwar also said the price of RON95 petrol will soon be reduced to RM1.99 per litre under a targeted subsidy scheme with further details to be announced by the end of September.

The government, he said, was committed to optimising national subsidy spending by ensuring that ordinary Malaysians continued to benefit from subsidies, while curbing leakage to those not eligible.

“Once the targeted RON95 subsidy is implemented, the government will reduce the price of RON95 petrol to RM1.99 per litre exclusively for Malaysian citizens, while foreign nationals will have to pay the unsubsidised market price.”

The initiative, he said, would benefit about 18 million motorists, including youths as young as 16 and gig economy workers.

“In 2023 and 2024 alone, subsidies for RON95 were estimated to cost nearly RM20bil annually.

“Even this year, despite a drop in global oil prices, the unsubsidised price of RON95 remains around RM2.50 per litre, significantly higher than the subsidised rate Malaysians currently enjoy,” he said.

He explained that the move aims to ensure that ordinary citizens continued receiving fuel subsidy while leakage to ineligible groups, including foreigners, are addressed.

To address the critical need for doctors in hospitals and government healthcare facilities, Anwar also announced that over 4,000 positions for government doctors, including contract medical officers, would be available this year.

He confirmed that 4,352 new doctors, including those on contract, would be hired this year.

According to projections released in 2023 by Dr Hirman Ismail, deputy director of the Health Ministry’s medical development division, the public healthcare sector would require 63,040 doctors by 2025 and 79,931 by 2030.

As of last year, there were nearly 52,000 doctors employed in government service.

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• Sim: Comply with ruling
• ‘Toll hike delay eases burden on daily commuters’
• Easing the people’s burden for a stronger economy
• Let people decide if they want the RM100 aid, says Dr Wee
• Some think Sabah has too many holidays

A HIKE THAT BRINGS JOY TO MANY

 

Explore Bukit Jambul Hiking Trails in Penang https://www.tiktok.com/@undergopenang/video/7210602454658960667?lang=en Tik Tok · Undergo Penang 0:57 Embark on an adventurous journey through the Bukit Jambul hill in Penang. Discover popular Bukit Jambul Hiking Trails in Penang Embark on an adventurous journey through the Bukit Jambul hill in Penang. Discover popular hiking trails with stunning views from the top.  

Participants taking on the uphill challenge of climbing Iconic Hill during “Climb To Change A Life” hiking event in Paya Terubong, Penang. (July 20, 2025) — ZHAFARAN NASIB/The Star.

GEORGE TOWN: Some came in wheelchairs, some used walking aids and some could only feel their way ahead.

But with determination and some help, about 60 differently-abled individuals made it to the top of Iconic Hill in Paya Terubong yesterday.

From the peak, which is high as a 73-storey tower, they watched the iconic Komtar tower, both bridges, Penang Hill, the Bayan Lepas industrial zone and even the shores of Kedah bathed in sunrise.

Among the climbers was Serena Yeoh Jing Han, 10, who lives with cerebral palsy.

Born with the condition, Yeoh did not learn to walk until she was five.

Yesterday, she pushed her limits by walking all the way up, one step at a time.

“She got up from bed immediately this morning (yesterday), excited and ready. She is not used to walking without support, but she was determined to finish the hike, and she did,” said her mother, Teh Mong Ling, 46.

Three-year-old Syed Aydan Mateen Syed Mustaqim, also got out of his stroller to complete the hike.

His father, Syed Mustaqim Syed Zainol Abidin, 39, smiled as he recalled the journey with his son, who lives with cerebral palsy.

“Usually, we only bring him to the playground. But today, we saw something different in him.

“His curiosity lit up, he was learning from everything he saw and felt,” he said.

Courage in motion: (Top) Participants taking on the uphill challenge of climbing Iconic Hill during ‘Climb to Change a Life’ hiking event in Paya Terubong, Penang. (Inset) Zy Kher and his father making their way up the hill. — ZHAFARAN NASIB/The Star

From toddlers to teens, the event drew people from all walks of life.

S. Puvarasan, 19, lost his sight to eye cancer when he was only one-year-old.

“I do not remember what the world looks like. But I could feel the sunshine, hear the laughter and breathe in the fresh air.

“This moment meant every­thing. It showed me that we’re not alone and we can lift each other up,” he said.

Themed “Climb to Change a Life”, the event was organised by Pertubuhan Hui Yin Seh, a Buddhist association, with the support of some 600 volunteers.

Hui Yin Seh chairman Khiah Hock Leong said the organisation wanted the differently-abled com­mu­nity to feel the joy of nature.

“But more than that, we want society to better understand their needs and learn to appreciate life a little more deeply,” he said.

Paralympic swimmer Zy Kher Lee, 18, also took part in the event, which was co-organised with his Zy Movement Foundation.

Zy Kher, who has prosthetic legs, walked to the very top with his father Walter Lee.

“Many children with mobility challenges rarely get a chance to enjoy hills or nature. Even climbing a small hill with friends can be life-changing.

“It’s a learning journey for them, and for everyone involved,” said Walter, 60.

Krisana Lalai, 56, from Bangkok, Thailand, also turned up to support the cause.

He founded the Friendly Design For All Foundation, a human rights organisation focused on promoting equal rights to accessibility, particularly for people with disabilities.

Paralysed from the waist down after an accident at 29, Krisana said he was moved by everyone’s spirit.

“This activity brings compassionate hearts together. It creates something meaningful, not just for those with disabilities, but for the families and friends who support them.

“It sends a strong message of unity and inclusion,” he said.

Penang youth and sports committee chairman Daniel Gooi lauded the initiative and reaffirmed the state’s commitment to inclusivity.

“This event reminds us that no one should be left behind,” he said on the sidelines of the event.

“Since 2016, our Accessibility Action Group has worked to make Penang more friendly to those with physical challenges.

“We’re not done, but we’re on the right path,” he said.

Besides the hike, participants also joined a series of telematch games and performances at the hilltop.

By LO TERN CHERN, the Star

Property sector forecast to stay strong

 

 High-end residential, industrial demand to stay solid

PETALING JAYA: Despite headwinds this year from US regulations for artificial intelligence chips and tariffs, the local property sector remains resilient, analysts say.

Hong Leong Investment Bank (HLIB) Research said high-end residential demand is recovering in the Klang Valley, signalling improving sentiment, while the Urban Renewal Act could unlock new redevelopment opportunities in prime areas

In Johor, the Johor-Singapore Special Economic Zone and better connectivity with Singapore are spurring development, although a surge in launches in areas near the Rapid Transit System Link risks causing oversupply.

In Penang, a stronger ringgit and trade uncertainty may weigh on demand for high-end housing.

Industrial demand outside of data centres is expected to stay strong, supported by robust foreign direct investments.

HLIB Research has an “overweight” call on the sector.

The research house said the property upcycle remains intact, supported by sustained investment inflows, structural reforms supporting sustainable growth, rising income levels from initiatives like the minimum wage and civil servant pay hikes, and the economy’s ongoing move up the value chain.

Its top stock picks are IOI Properties Group Bhd (IOIProp), OSK Holdings Bhd, Sunway Group Bhd and Sime Darby Property Bhd.

After around a decade of oversupply and subdued demand, the Klang Valley office market is also showing signs of recovery as the prolonged supply glut is beginning to ease.

Several significant new malls in the Klang Valley are also slated to open this year.

These include Sunway Square Mall located in Sunway South Quay, Sime Darby Property’s Senada Mall in KLGCC, the second phase of Pavilion Damansara Heights, 118 Mall at Merdeka 118, Ombak Mall in the KLCC area and Hektar World in Damansara, Petaling Jaya.

The research house said this year is shaping up to be one of execution and delivery for developers and more developers are diversifying beyond residential property into the industrial segment, establishing new revenue streams in line with Malaysia’s pivot towards a high-value, high-tech economy.

The next two years are also shaping up to deliver some of the largest initial public offerings (IPOs) in history, as property developers move to unlock value by spinning off key business segments.

Sunway Group is expected to list its healthcare segment in the first quarter of next year with an indicative market capitalisation of RM20bil, which could be the largest IPO ever on Bursa Malaysia.

IOIProp is also likely to list its Malaysian real estate investment trust (REIT) next year, with an estimated value in the range of RM7bil to RM8bil, which could make it the largest REIT listing in Bursa’s history.

IOIProp has plans to list its Singapore REIT in 2027, valued at about S$8bil.

It could also be one of the largest IPOs in over a decade on the Singapore Stock Exchange.

SP Setia Bhd is expected to list its portfolio of assets next year, valued at around RM2bil.

The potential listings reflect the strong underlying asset value and growing investor appetite for quality Malaysian and regional property-linked investments, the research added.

A high target — can we meet it?

 

 Growth needed: The next five years will thus be crucial for Malaysia if it is to become a high-income nation. — FAIHAN GHANI/The Star

HERE’S the good news – the World Bank has declared Kuala Lumpur, Labuan, Penang, Sarawak and Selangor to be high-income states. The bad news, though, is that Malaysia as a whole is not there yet.

This is the latest high-income data based on Gross National Income (GNI), which is the total amount of factor incomes earned by the residents of a country. The country’s GNI per capita of RM53,400 annually falls short of the high-income threshold of RM63,000.

Kudos to Sarawak as it has solidified its position since joining the high-income state ranks in 2023. It must be doing something right.

Three years ago, there were only three states – Penang, KL and Labuan – on the list but Sarawak joined two years ago and Selangor made the cut last year.

Now, there are a total of five high-income states (including federal territories) but the vast majority of states are below the threshold – and that’s not good as they exert a pull on the country as a whole as it bids to join the club.

The findings, however, do not come as a surprise. Malaysia remains caught in the middle-income trap.

We are too rich to compete with low-cost economies like Vietnam and Cambodia but we are just unable to stand alongside high-income nations like South Korea and Singapore.

South Korea, once poorer than Malaysia in the 1960s, is now a global tech powerhouse. It achieved this through strategic industrial policy, heavy investment in education and R&D, and a relentless focus on productivity.

Singapore, without natural resources, became a financial and innovation hub through clean governance, meritocracy, and human capital development.

Malaysia now finds itself outpaced by these countries that were once on equal or even lesser footing, and if we are not serious about moving up, we could soon be overtaken by Vietnam.

This is not just about achieving a statistical milestone. It’s about ensuring Malaysians enjoy better jobs, stronger public services, global competitiveness, and the ability to keep our brightest minds at home.

The next five years will thus be crucial for Malaysia. We can’t afford to miss the boat.

The upcoming 13th Malaysia Plan (RMK13), covering 2026-2030 and Budget 2026 need to address the issues that are holding us back from becoming a high-income country. If we don’t, we will lose out to more of our neighbours.

RMK13 and Budget 2026 may represent our last – and best – chance to break free and secure high-income status.

For a start, the plans must boldly tackle governance and institutional weaknesses. Policy inconsistency, bureaucratic inefficiency, and rent-seeking behaviour continue to erode investor confidence.

RMK13 must be reform-driven and bold. It cannot be business as usual. Certainly, we don’t need the plan to be tabled with poetic language. It’s the content that matters.

A high-income country needs not only a strong economy, but strong institutions. For one, the judiciary has to be protected and judges must be persons of integrity. Perception is important.

A strong political will is also essential and Malaysia certainly cannot keep changing prime ministers and governments.

We need to fund the future, not the past, and we cannot live like we did in the past, with heavy subsidies which have spoiled Malaysians.

Where RMK13 provides the vision, Budget 2026 must be the engine. Fiscal policy must be repurposed not just to spend, but to invest – in people, productivity, and innovation.

As the world moves rapidly toward a knowledge- and innovation-based economy, Malaysia is at a critical juncture.

We have to increase funding for TVET (technical and vocational education and training), with incentives tied to graduate employability. Among others, we need:

> STEM scholarships and national reskilling initiatives for workers displaced by automation.

> Tax incentives and matching grants for R&D, automation, and green technologies.

> Expanded digital infrastructure, particularly in rural areas, to promote inclusive growth.

> A Malaysian Innovation Fund to support start-ups in Artificial Intelligence, biotech, and climate tech

Malaysia must address its productivity crisis. Growth can no longer rely on cheap labour or natural resources. We must transform our industrial base through digitalisation, automation, and a strong pivot towards advanced manufacturing and services.

This means supporting high-value sectors like semiconductors, electric vehicles, biotechnology, and green energy.

To make these a reality, we must overhaul our education system. Our youth are entering a job market that demands digital skills, creativity, and adaptability.

Are our tertiary institutes producing the right kind of graduates who are trained and marketable? Malaysia needs graduates with strong technical skills in in-demand fields like IT, engineering and healthcare.

Strong soft skills, adaptability and an entrepreneurial mindset certainly help. It will be even better if they have the ability to speak and write in Bahasa Malaysia, English and Chinese.

With due respect, the teaching of the Laos and Cambodian languages in our schools can wait even though they may be just elective courses.

Within Asean, Malaysia has advantages over some member countries. Beside our language skills, we have an established legal system, and we have the British to thank for that.

Malaysia has a strong middle-class base as well as a sound political system. Our democratic system can be noisy at times but it’s often restrained.

Malaysia has enough lawyers and doctors and it doesn’t help that every year we produce students with a string of distinctions who believe they are entitled to places in the top universities in the country.

Are the distinctions secured by our SPM students even on par with the standards imposed by Singapore, Hong Kong and the United Kingdom?

RMK13 must prioritise TVET reform, industry-academia collaboration, and investments in STEM (science, technology, engineering and mathematics) education from an early age.

We are still talking about STEM while China is already introducing AI modules – and at primary school level!

Third, the plan must put innovation and research at the heart of national strategy. Malaysia currently spends less than 1% of GDP on R&D. To become a creator – not just a user – of technology, this must rise to 2–3%, with strong government-industry-academia partnerships.

At the same time, Budget 2026 must address the brain drain by offering meaningful career paths and incentives for Malaysians abroad to return home – including tax relief, housing support, and leadership fast-tracks for top talent.

Expatriates with skills, and who have worked in Malaysia, surely deserve an easier track to be permanent residents.

Malaysia has the resources, the location, and the population to succeed – but seems to lack the political will and strategic coherence to execute bold reforms. We spend a great deal of time on inconsequential and unproductive political discourse, often on murky issues of race and religion.

Tomorrow’s investments in Malaysia are no longer about setting up factories, which outdated aging politicians still seem to think about when questioned about where foreign direct investments would go.

All is not lost, though. Attaining high-income status is not easy for any state or country. This year only one nation – Costa Rica – moved from upper middle income to high-income category.

But it is certainly not going to be easy for Malaysia. No one can predict what next year may bring given the uncertain and volatile economic outlook which doesn’t bode well for trading nations like Malaysia.

The World Bank high-income threshold is not fixed and it adjusts its measurement each year, so a lot depends on how Malaysia would compare with other nations but let’s not forget that even if we grow, other countries could compete harder and that could make the high-income goal even more distant.

Malaysians, especially the politicians, must understand this for the interest of the nation.

Look at the graph – the bottom three worst performing states are Kedah, Perlis and Kelantan, which speaks volumes. We can’t help these states if they prefer politicians who have promised them a ticket to heaven, while little is done for the here and now.

RMK13 and Budget 2026 can change that – if they are driven by vision, evidence, and courage.

For the country, the window to become a high-income nation is closing. We must act – boldly, intelligently, and urgently – before it shuts for good.

On the Beat | By Wong Chun Wai

Manus AI's 'de-China playbook is a trap

 

Rebranding bid: The website for the Manus AI agent arranged on a computer in Hong Kong.Manus is doing everything it can to sever any ties to the mainland while its parent company Butterfly Effect reportedly eliminated all its China-based jobs last week. —Bloomberg

WHEN Chinese startup Manus previewed an artificial intelligence (AI) agent earlier this year, it went mega-viral. It came on the heels of DeepSeek, when global excitement over China’s AI breakthroughs was at a fever pitch, and nobody wanted to miss out on the next surprise hit.

Now, Manus is doing everything it can to sever any ties to the mainland. It relocated its headquarters to Singapore, and its three co-founders have made the move abroad as well.

Butterfly Effect, the company behind Manus, reportedly eliminated all its China-based jobs last week.

It has also scrubbed content from domestic social media platforms Weibo and Xiaohongshu (also known as RedNote), despite maintaining an active presence on X.

Users in China trying to access the site this week were met with the message that it’s “not available in your region,” a departure from a previous memo stating that the Chinese version was under development.

It’s the choice these tech firms are forced to make in the current geopolitical climate: stay in the hyper-competitive domestic market or go for more lucrative growth overseas. You can’t have both.

Moving abroad means going through the arduous process of trying to “de-China” the company’s origins.

It’s a shame given this background is what drove so much hype about Manus in the first place.

Chinese firms have also traditionally had an edge in consumer tech, with access to a vast pool of affordable engineering talent and a hardworking culture. Plus, dubious identity rebrands almost never work.

Manus’ decision to recast as a Singapore company follows the furore that emerged in the United States after prominent Silicon Valley venture capitalist (VC) firm Benchmark (an early backer of the likes of eBay Inc and Uber Technologies Inc) announced it was leading a US$75mil funding round in Butterfly Effect.

Fellow VCs accused Benchmark of “investing in your enemy” and equated it to backing Russian efforts during the space race.

The plans have also come under US Treasury Department scrutiny over new rules related to investments in certain Chinese technology.

It will be very hard for Manus to ever rid the China label from its story, especially after all the attention it received.

Co-founder Ji Yichao was on the cover of Forbes China more than a decade ago, as one of the 30 under 30 entrepreneurs in the country. State-backed mouthpieces have also celebrated Manus’s rise, so trying to cleanse its Chinese-ness risks domestic backlash.

It’s not the first time this has happened. ByteDance Ltd’s TikTok has gone to great pains to rebrand as an American and Singaporean company and assuage Washington’s fears about its Beijing origins. But none of this stopped the United States from passing a law last year requiring the parent company to divest from the app that doesn’t even operate in the mainland, or be banned due to perceived national security concerns. This doesn’t bode well for Manus.

The AI sector has become a lightning rod for China hawks in the United States, who view any consumer-facing application using the tech from its geopolitical nemesis as a threat.

AI video startup HeyGen Inc garnered investment and a raft of US customers after making the move from China, yet was still singled out by lawmakers over potential ties to the Communist Party.

Its co-founder said it’s been “disappointing” to see his heritage treated as something he should “be ashamed of.”

Wrapped up in national security worries is more than a hint of xenophobia.

Targeting consumer tech firms based on the national origins of their founders is an ineffective strategy.

US concerns about potential threats that data could leak to China or that the CCP could influence algorithms should implement more comprehensive rules to mitigate these risks.

When it comes to buzzy new technology like the Manus AI agent, industry-wide standards are overdue.

Tools that are designed to allow software to take on increasingly complex tasks on their own carry unique risks, including who is liable when things go awry and how much control should be ceded to machines.

Global policymakers should address these concerns regardless of where the AI agent comes from.

Icing out the best and brightest tech minds risks leaving Silicon Valley blind to innovation happening elsewhere. It’s in America’s interest to do more to support these founders by bringing their talents and breakthroughs to the United States. —Bloomberg

By Catherine Thorbecke,  is a Bloomberg Opinion columnist covering Asia tech. The views expressed here are the writer’s own.

CAP Calls for Vacancy Tax and Tighter Controls to Curb Property Speculation

The Consumers Association of Penang (CAP) strongly supports the introduction of a vacancy tax on residential properties that are left unoccupied for extended periods. We believe this measure is urgently needed to address the deepening problems of property speculation and declining housing affordability in Malaysia.

A vacancy tax typically applies to properties that remain vacant — unsold or unrented — for more than six months in a year. In countries such as Canada and Australia, particularly in cities like Melbourne, this tax is set at between one and three per cent of the property or land value. Its primary aim is to deter property speculation, particularly in the medium-cost segment, where rising prices in the subsale market have increasingly placed home ownership beyond the reach of middle-income earners.

According to the Khazanah Research Institute, housing prices in Malaysia rose by an average of 5.8 per cent per year between 2010 and 2022 — well above the healthy growth range of three to four per cent. As a result, many in the M40 income group find it difficult to purchase their own homes. In urban areas, the typical ‘modern’ three-bedroom apartment ranges from 800 to 1,000 square feet. This limited space is not conducive to multi-generational or extended family living, nor does it offer adequate privacy or comfort for those forced to share with other families.

Speculators often compete directly with genuine homebuyers, inflating demand and thereby encouraging developers to acquire more land to keep up with what is essentially artificial pressure. In land-scarce areas like Penang, this has resulted in a rise in land prices and a growing reliance on costly land reclamation from the sea.

It is also worth noting that many apartment blocks are not fully occupied, despite having been sold. In these developments, owners of vacant units — who are not living in them and cannot easily sell or rent them out — often neglect their obligations to pay maintenance fees. This undermines the upkeep of the building and penalises residents who do live there.

At present, many residential properties, particularly in urban centres, remain empty while thousands of Malaysians continue to struggle to find homes they can afford. The property market has become increasingly dominated by those who treat housing as a speculative investment rather than a basic human need. This trend has led to inflated prices and a false sense of scarcity, especially in cities where housing demand is greatest. A vacancy tax would act as a strong disincentive to leave properties idle and would encourage owners to either rent out or sell them, returning more units to the active housing market.

In addition to the vacancy tax, CAP calls on the government to review and strengthen the Real Property Gains Tax (RPGT). The current system fails to adequately discourage short-term speculation. We propose a more progressive model that imposes significantly higher tax rates on profits from properties sold within a short holding period.

We also urge a revision of stamp duty rates, with higher charges levied on the purchase of second and subsequent residential properties. These measures should be especially firm in cases where the property is not intended for owner-occupation, or when purchased by foreign buyers. In doing so, the government can help ensure that Malaysians are not priced out of home ownership by those seeking to profit from housing as an asset.

Moreover, CAP recommends tighter controls on housing loans. Banks and financial institutions should apply stricter lending criteria for individuals who already own multiple residential units. Loan-to-value ratios should be lowered in such cases to reduce excessive borrowing for speculative purposes.

Unless the government introduces comprehensive policy reforms, Malaysia’s housing sector will continue to favour investors at the expense of ordinary citizens. It is the government’s duty to uphold the principle that housing is a fundamental right, not a speculative commodity.

CAP therefore urges policymakers to act with urgency and resolve. The combined approach of introducing a vacancy tax, strengthening RPGT, revising stamp duties, and tightening housing loan regulations will go a long way towards restoring balance, fairness and accessibility in the property market.

 Mohideen Abdul Kader

President
Consumers Association of Penang

Malaysia-NZ trade set to soar

 

 AUCKLAND: Trade between Malaysia and New Zealand is expected to increase by 50% in the next five years, says Datuk Seri Dr Ahmad Zahid Hamidi.

The Deputy Prime Minister said forging closer bilateral and trade ties with New Zealand was more crucial now in light of the changing global landscape.

“Our shared target to increase Malaysia-New Zealand trade by 50% by 2030 is not only achievable but necessary in a world where regional resilience matters more than ever,” he said during the Asean-New Zealand Business Council Engagement session held here yesterday.

He said trade agreements such as the Malaysia-New Zealand Free Trade Agreement (MNZFTA) and Asean, Australia, New Zealand Free Trade Area (AANZFTA) serve as a catalyst for boosting bilateral trade.

In 2024, he said the trade volume reached RM10.72bil (US$2.34bil), making Malaysia New Zealand’s second-largest trading partner within Asean.

“These numbers aren’t just statistics; they reflect confidence, connectivity and commitment between our economies,” added Ahmad Zahid, who is in New Zealand for a five-day working visit.

He said the MNZFTA also enabled 99.8% of New Zealand’s exports to enter Malaysia duty-free, with the AANZFTA also increasing exports to Asean by nearly 60% since 2010.

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Anwar advances Malaysia's diplomatic agenda

“The AANZFTA is working well and should continue to be strengthened. Malaysia has also doubled its usage of AANZFTA benefits, from RM5.8bil in 2016 to RM12.9bil in 2023,” he added.

With the recent upgrade to AANZFTA and the momentum created through the Regional Comprehensive Economic Part­nership (RCEP), Ahmad Zahid said that both nations were better positioned to build a fair, modern and sustainable trade architecture.

AANZFTA, a trade agreement between Asean member states, Australia and New Zealand, came into force in 2010 and is a key pillar in both nations’ ties with South-East Asia.

The upgrade of AANZFTA came into force on April 21 this year to further reduce export barriers while boosting trade in the region.

Ahmad Zahid said Malaysia was looking at three key areas – sustainability, digital transformation and food security – to deepen trade collaboration between the two countries.

“New Zealand, with 87% of its electricity sourced from renewables, is a leader in green transition. This aligns closely with Malaysia’s commitment to achieving net-zero emissions by 2050.

“There is vast space for cooperation in clean energy, carbon markets and low-carbon technology,” he added.

On Malaysia’s part, Ahmad Zahid said the MyDigital agenda complements New Zealand’s strengths in ICT (information, communication and technology), offering opportunities for joint ventures in AI, smart cities, cybersecurity and digital trade governance.

“The agri-food sector also offers enormous potential. As Asean’s middle class grows and consumption patterns shift, New Zealand’s reputation for quality, traceability and innovation fits well with Malaysia’s strengths in halal certification and regional logistics.”

Ahmad Zahid, who is also Rural and Regional Development Minister, said it was crucial that the bilateral economic partnership continues to be grounded in human connection. 

“Thousands of Malaysian students have studied in New Zealand and tourism between our nations continues to thrive. 

“These exchanges are not just heartwarming, they are the glue that holds economic ties together, builds trust and creates long-term understanding,” he added.

On economic growth between New Zealand and Asean, Ahmad Zahid said it must be inclusive of micro, small and medium-scale enterprises (MSMEs) so that the latter was not left behind.

To achieve this, he said it must entail improving access to trade finance, digital tools, and capacity building between Asean member states and New Zealand.

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