Kuala Lumpur:The RM2,000 minimum wage under Budget 2027 has been agreed upon by the National Wage Consultative Council, which includes representatives from both workers and employers.

According to BERNAMA News Agency, Treasury secretary-general Tan Sri Johan Mahmood Merican stated that the Cabinet has considered extending the implementation period for micro, small, and medium enterprises (MSMEs) to prevent placing undue burdens on them.

The minimum wage increase will initially apply to large companies, recognizing the challenges SMEs face due to the conflict in West Asia, which may require them to adapt their business models over a longer period.

Prime Minister Datuk Seri Anwar Ibrahim previously announced that the minimum wage would rise from RM1,700 to RM2,000 per month, effective June 2027, impacting over four million workers. Additionally, SMEs with annual sales below RM50 million will be temporarily exempted from the new minimum wage requirement.

Addressing concerns about maintaining a fiscal deficit target of 3.3 per cent while managing higher subsidies, Johan emphasized the importance of maintaining investor confidence to showcase Malaysia's financial management discipline. The government is committed to achieving a fiscal deficit as low as three per cent by 2028, with targets of 3.6 per cent for this year and 3.3 per cent for next year.

Johan also highlighted the government's awareness of the uncertainty in West Asia and noted that current projections expect oil prices to remain high. The estimated petroleum product subsidy for this year is around RM40 billion, with adjustments planned if oil prices exceed expectations.