This article first appeared in The Edge Malaysia Weekly on October 20, 2025 - October 26, 2025

Putrajaya’s decision to grant Malaysians with a valid driving licence a generous 300-litre monthly quota of RON95 fuel at a deeply subsidised rate of RM1.99 per litre has puzzled even some of the most seasoned critics. Minister of Finance II Datuk Seri Amir Hamzah Azizan tells The Edge’s Cindy Yeap and Kathy Fong, however, that the government has broader plans to ensure fiscal savings are realised over time — even as it commits to reducing annual borrowings to bring the budget deficit below 3% of GDP within the next five years.

The following are excerpts from the hour-long interview, edited for clarity and brevity.

The Edge: What was some of the thinking behind what went into Budget 2026?

Datuk Seri Amir Hamzah Azizan: This budget continues the Ekonomi Madani journey. One of the key things we wanted to do was to focus on ensuring that we reset the economy — [that is,] drive more economic complexity, making sure governance is a lot tighter and that the rakyat get a better quality of life. So, that framing was very, very important for the budget, along with recognising that this is the first year of the 13th Malaysia Plan (13MP) — elements of that need to be in.

We also needed to take into account the environment we operate in. Whether we like it or not, world [growth] is going to slow down because tariff disruptions have rattled the world a little bit and people are realigning themselves.

Budget 2026 also addresses what we need to do to ensure that we can stimulate and support the domestic economy better, especially in terms of the components of the domestic economy like exports, investment and small and medium enterprises (SMEs) … One of the key engines of Malaysia has always been SMEs. So, attention [has to be on ensuring] SMEs have the legs to ride out any challenges along the way.

We also wanted to make sure that the journey we started in terms of fiscal reform continues. Our fiscal deficit is targeted to drop to 3.5% next year, despite very minimal tax measures. But all the reforms that we’ve been doing in the last few years are paying off … So, this will give Malaysia a good footing as we move forward [with the benefit of] government stability, clarity of policy; investor confidence has continued to support us as we move ahead. In the first six months, FDIs [foreign direct investments] were still strong, [approved investments were] 18.7% higher than the previous year, at RM190.3 billion, creating more than 89,000 new jobs.

We have seen initiatives gaining traction. The Johor-Singapore Special Economic Zone (JS-SEZ) received RM37 billion worth of investments [in the first half of 2025] at last count, which is 66% of total investments in Johor. People were sceptical of our Single Family Office scheme, but we have six SFO subscribers already, with nearly RM400 million in assets under management (AUM) in less than a year [since its launch in September 2024], with a strong pipeline of at least 30 more expressing interest, [which] the Securities Commission Malaysia (SC) will make sure [is realised] by end-2026. So, this budget was a journey that addresses all elements of the Ekonomi Madani framework.

Were there any elements of pump-priming in Budget 2026 or is Putrajaya conserving bullets?

Historically, pump-priming has always been looked at as mega projects and the like, but this government has been very clear that we were not really looking at mega projects. We want to look at real transformation and infrastructure that matter, making sure that the investments made in the past have time to crystallise and pay back.

For example, people ask why development expenditure (DE) is RM81 billion versus RM86 billion the previous year [Budget 2025 as tabled]. But don’t just look at the [headline] DE, look at the DE asas [basic], which has gone up from RM55 billion to RM57 billion, which means we are clearing space from the non-DE asas to have more real DE for stimulating the economy and growing infrastructure that the country needs.

Another key thing, we are deploying support from GLCs [government-linked companies] and so on. So, the total budget actually lays out RM470 billion of spending versus RM450 billion in the previous year. This money is going into the domestic economy, [and] quick-yielding projects. There are no mega projects — it is all about doing things that are a lot more rakyat fronting: repair of schools, clinics and so on. We award the contract, the money churns into the economy and it multiplies faster [as opposed to] if we award a mega project, which takes two years of planning; three, four, five years of development, then maybe in seven years’ time, we will get something … So, the government is really focused on the small projects because it fits into the theme of helping us cushion the blow for the economy and pump-prime the economy along the way.

And because of that, we provided financial assistance in terms of SJPP [Syarikat Jaminan Pembiayaan Perniagaan Bhd, which is wholly owned by the Minister of Finance Inc; and where government loan and guarantee facilities] have risen from RM20 billion to RM30 billion to broaden access for SMEs, high-value sector companies and support micro-entrepreneurs. So, yes, there is pump-priming, but good pump-priming that builds infrastructure that matters for the rakyat, things that feed the SME system while the market is under pressure to also continue supporting our full employment. Today, unemployment is down to 3%. If we continue to do wage reforms, push along creating better-quality jobs, then, over time, things [quality of life] will go up and up.

I always like to look at data. EPF (Employees Provident Fund) contributions are up 9% this year compared to last year. So, again, it is a sign that jobs are filling up and wages are higher. That’s why the EPF is collecting more money … So, the formal system is working. People always thought the formal system would decline over time, that jobs had become more informal. But, with the overall unemployment rate at 3%, it also implies that the informal sector is working and filling up well. I can also see the EPF’s voluntary contribution numbers have grown [to RM11.68 billion], up 55% from [RM7.55 billion in] 1H2024. I take that as positive signs that the economy is moving very well.

How do you count DE asas, or basic DE? We brought up pump-priming because 2026 GDP growth projections of 4% to 4.5% come in below the 4.5% to 5.5% average targeted under the 13MP.

DE asas is the real DE that builds clinics, schools, hospitals, roads … In the past, some parts of DE were used for refinancing. What we did this year was to look very carefully because there must be a better way to free up more money. That is why the financing portion has dropped and we managed to do that despite the fact that the fiscal deficit also drops. So, it’s better discipline and a regime that actually helps us get better. When we announced the 13MP, the average of 4.5% to 5.5% was an average over the five-year period (2026 to 2030). So, some years, we’ll get 6%, some we may get 4%, but the average will be within that 4.5%-to-5.5% range. It would not make sense to project a wide range of 3.5% to 7%. But let’s be clear: During the 13MP, we do want to get 4.5% to 5.5% … Next year will probably be a bit softer because of global conditions but a lot of effort is being made to ensure we have resilience in the economy.

As a technocrat, you once said you were just here to do your job. One and a half years as FM II, you were tapped to assume the duties of the Economic Minister overseeing the 13MP. Are you happy with the pace of reforms?

Let’s be realistic. I joined in December 2023 at a period when the fiscal deficit was still high, during which the rollout of reforms was still a question mark — could we [float] diesel, roll back electricity [subsidies], retarget RON95?

Now, coming up to two years down the road, we have done two SST (sales and service tax) adjustments and targeted it better so that it doesn’t affect segments that we don’t want to be dramatically affected. For electricity subsidy rationalisation, 85% of consumers faced no increase; the bottom end of the population gets support; and top-end consumers, industry and commercial pay a bit more. But net-net, the government doesn’t put any more subsidies into electricity, with about RM6 billion in savings.

Water was more difficult because we had to align the states, and all states are in and now we’ve got to the stage that, at least on the operating basis, most of the water companies in the states are now getting to better balance — that is important because now we have the capacity to make sure that we will have surplus over time to reinvest back to kill the root of the problem. Because if you don’t have enough money, you don’t build infrastructure; so, non-revenue water leakages are still high.

People were always concerned; [critics say] Malaysians like to talk, but they don’t do things.

We did diesel. Everybody told me diesel is easy because it’s mostly commercial, but it still needed some manoeuvring to make sure there were no unintended consequences, and that we provide support [where necessary], and we got RM5 billion in savings for diesel. Smuggling still exists, but at least we are not subsidising whatever is going across the border, which is a huge relief.

And we rolled out [Budi95] for RON95. We said we needed to make sure the mechanism works and didn’t want the user experience to be difficult. I think Budi95 delivered that … The customer experience did not change. If they used to buy at a pump, they still buy at a pump. If they used to go to the shop, they still buy in the shop, so there was no [adverse] reaction, [which] was most important because, as with every major shift, you do not want to back-pedal. I think for RON95, we’ve managed to do that.

But what most people don’t understand is what was important for RON95, [which is that] we have the capacity to execute across the country … and we have a technology that can be used for other things. And people now appreciate being a Malaysian. Your IC is worth something [while previously perhaps taken for granted]. It now gives you the privilege to buy RON95 petrol at RM1.99 per litre while everybody else pays RM2.60.

I’m also hoping [for] some moral suasion … People who drive fancy cars, maybe they shouldn’t swipe the IC in the machine. You can afford [market price], but it’s a moral suasion at the moment and the most important part was to get it done, roll out.

But now I have data. Give it six months. We will see what the real consumption levels are; we will see patterns that we didn’t use to. Today, when people complain they didn’t get RM1.99 per litre, we are able to track individual transactions. We can say, ‘Sorry, you skipped this step; you didn’t put your IC in; you think you did but you didn’t.’

Because the system is that powerful today; every single person who has the IC can check the consumption pattern. They can go online and use MyDigital ID to check. And we’re able to see this is what they’ve been buying. So, we’re beginning to give people the literacy capacity from that side.

And we’re beginning to get some bad behaviours shifted. For example, [Minister of Transport] Anthony [Loke] said 2.4 million people had not renewed their driving licence for over three years. That’s dangerous. If anything happens, the insurance is invalidated because they’re not licensed to drive. But because we tied RON95 to being Malaysian and having a valid driving licence, suddenly people go and renew … We are beginning to find that it starts to clean up a lot of things along the way [and], for the first time, the rakyat see in the receipt how much the government is subsidising petrol. In the past, people took it as ‘that is my price, what I pay’.

Is this a step in the right direction? Could the step have been bigger, bolder because it raises the question of whether the current or any government would actually reduce the RON95 quota or raise pump prices later when the need arises. It is human behaviour: Starting with 300 litres, it would be difficult to take away later, especially, realistically, with the election date drawing nearer.

Let me ask you a different question. Who gave us a chance [the confidence] that we would do diesel or RON95 two years ago? There was a lot of scepticism that the government would ever execute before they were done. It may not be [a] perfect system, but it worked and it gave us savings. And it has also given us a [new] tool … There are a lot of other things in Malaysia that we also subsidised in the past but had no control over capacity.

No government wants to clash over petrol, having seen the consequences of getting it wrong along the way. So, credit should be given to the government for choosing this path, that it took the step [forward] when most other governments merely talked [about it] for years. This government has done it. You can tell me, ‘We should have gone further’ — yes, but we still pulled the trigger. Take it as a win. That is why when people ask me, I say: ‘I don’t know about you, but I think RM2.5 billion in savings is good because every single sen matters.’ When we did diesel, people wondered whethered the price was going to stay. We moved it weekly. And I’ve said for RON95, after one month, open market prices will be [set] weekly.

Should the government have taken a broader view on RON95 subsidy rationalisation since the ultimate goal is to save public money for better use? With a 300-litre quota, people are not discouraged from driving or motivated to take public transport for the environment.

There is no magic pill you can take that suddenly solves all problems for Malaysia, right? For RON95, we achieved subsidy savings, cutting out people who are not entitled. To move people to public transport, we must first address the root question: Is public transport convenient enough? We have a decent MRT, LRT system, more so when the new line opens … KTM has also decided to shore up the public bus system to make it a little bit more convenient [and] the government has decided to put money into improving frequency and train sets. When you have the first and last mile solved, then you have a motivation to encourage people nicely to take public transport. If not, then [I can’t reasonably] tell people: ‘Don’t drive; take the train.’ When it is convenient enough, people will shift and, as that shift occurs, we can talk about other measures that help accelerate it even more. I can’t accelerate just by using price on fuel as the driver, [with] cost-of-living pressures still high in the country.

This is something I also learnt since I came from corporate and moved to the government. In government, there’s no one-size-fits-all [solution]. You need to think about the ecosystem as a whole and how it needs to interact in order to build the case to move, because the people who are affected are wide-ranging, and you cannot then say, ‘Never mind, [let’s do it another way],’ because it’s about real people, real lives.

Is there a timeline for the government to reduce the petrol subsidy to, or cap it at, a certain amount?

Our focus now is to make sure it runs well and gaps in the system — e-hailing, boat operators and so on — [are bridged]. With the data that we’ll get, we will prove to people that 300 litres are a bit too much for some groups, [or] maybe you need a bit more. So, there will be refinement to that based on what the data is saying. The important thing is that the Budi95 system now gives us very, very good data that we can take action with. For instance, if you were using 100 litres and suddenly you max out 300 litres every month, I can have the capability to ask and check. For e-hailing, if they have been claiming based on commissions from that data ... [then] we want to tighten up that system to make sure things are done right. But let us first settle [the basics].

What is next in terms of sequencing reforms? You mentioned needing six months of data. Does that mean enhancements will come after analysing the data?

Let us analyse and see what it is telling us. Then, we talk. But, again, the Budi95 system is good enough for me to introduce it to other systems. We’re talking to KPDN (the Ministry of Domestic Trade and Costs of Living) about using it for cooking oil. The IC can be used as a control feature to plug leakages. Today, the government still provides 60,000 tonnes of subsidised cooking oil monthly through the Cooking Oil Stabilisation Scheme (COSS), which is intended to meet the needs of eligible households and microbusinesses. We estimate households use 27,000 tonnes. So, where have the [remaining] 33,000 tonnes gone? Let’s give hawkers some, but I don’t think [we will need] 60,000 tonnes.

What about diesel in Sabah and Sarawak?

We need to explore, but we won’t push ahead until we are comfortable. The good thing is the run now is giving us transparency in terms of patterns and where usage is going to be … At this point in time, again, the government needs to make sure that it does things on a measured basis, and that when it does things, [those decisions stick] … The worst thing that can happen is we roll out [measures] and, two months later, we pull back — [because] I cannot come back again for another six years, or something like that. So, making sure it is done right is the most important thing. Alhamdulillah, so far, electricity, water, diesel and RON95 are on the right track.

How concerned is Putrajaya about bringing down debt guaranteed for PTPTN and civil service housing loans under LPPSA? Budget 2026 raised the LPPSA loan ceiling up to RM1 million, allowing new loans, even when existing has not been paid off… is the ceiling not a bit high?

LPPSA (Lembaga Pembiayaan Perumahan Sektor Awam, or Public Sector Home Financing Board) is actually a good credit because it has the ability to deduct from one’s salary. Many people were thrilled to get that sort of security arrangement. We’ve stopped providing funding to LPPSA; it has the ability now to self-generate and self-borrow in the market. So, I’m actually quite chill about LPPSA, because nobody wants to lose their house.

For PTPTN (Perbadanan Tabung Pendidikan Tinggi Nasional, or National Higher Education Fund Corp), the government has taken a step forward by saying that if you have not paid your outstanding loans for a while [despite] having a steady, good income, we will stop you from travelling abroad and I think that will claw back quite a lot of money.

We’ve also made nuances … You don’t automatically get a loan converted into a scholarship if you get first class [honours]. For now, we are limiting it to only public universities because we find that the proliferation of private universities brings quality into question. Again, we have the capacity to tighten.

Is the LPPSA enhancement part of how the government is trying to incentivise new civil servants, who are no longer pensionable? What is the status of the new civil service pension scheme — expected to shift from a defined benefit (DB) to a defined contribution (DC) model — which was supposed to be finalised by end-2024? Has progress stalled because some states say they will continue to offer DB?

That decision on [converting] new civil servants [to DC] was already taken 1½ years ago. JPA (Jabatan Perkhidmatan Awam, or Public Service Department) is tightening up some [benefits], but the people who entered from that point 1½ years ago did so on a contract basis. In the past, what used to happen was that they put money in EPF and, after three years, they could choose whether to be pensionable ... Now, they cannot convert to pension, because we drew the line 1½ years ago.

Will there still be an announcement on the new DC scheme?

The fine-tuned details will be announced, but the scheme is already in existence because all new entrants came in under contract.

What JPA is doing now is looking at whether the DC scheme needs improvements in the mechanism — say, some rights that exist under the pension scheme are not offered under the DC scheme. They may want to enhance the DC scheme a little to offer those things.

Do you mean improvements on healthcare benefits?

Maybe some enhancements, but the principle is there is no conversion back to DB.

What about some states saying they will continue with DB?

I don’t want to add too much to the conversation. JPA needs to [work out the details] and then work it through. But the option for new federal government civil servants to convert to the pension scheme has disappeared. States may have some slightly different mechanisms, but if they want to offer DB, they [will have to] pay.

There is some concern that emoluments, retirement and debt service charges continue to rise while development spending is flat, at best, excluding GEAR-uP. What are your thoughts on this?

The reality is the government needed to be fair to its civil servants. So, when it did the salary adjustment last year — and there’s another round in January — it was to address what has been long awaited. This year, we’re addressing the judiciary because it has been 10 years since they’ve had [a salary increment]. For judges, it is worse. When you are appointed as a judge, you’re given [the same] salary until you get promoted to a different level … That’s why the number we had to put in was a bit bigger [at 30%].

So, what the government needs to do is to look at how we then strengthen our revenue collection … That’s why once SST has gone through, we reduce the subsidy bill so that we prove a net [increase] to the government. We will be introducing technology, through e-invoicing, things that make transparent the shadow economy, and then start to further refine government processes to make sure that wastages are cut.

I know a lot of people have comments about the [Government] Procurement Act, but it is very powerful in terms of facilitating the government in making sure the tender process is done right. The review mechanism put in, holding people accountable, is an important element of the Act because, in the past, the worst that the government could do was take administrative action on the people who are involved. Now, if you’ve done something wrong, I’m sorry — we have the right to [pursue criminal charges against you], whether you’re a junior officer, head of the civil service or a minister. If you breach your project, you can be criminally charged, and that’s a huge deterrent.

Second, the Procurement Act includes review mechanisms that allow anyone who believes the process is flawed to bring the matter before a panel and, if necessary, escalate it to a tribunal. In the past, there was none of that check and balance that creates an environment in which procurement becomes a lot more rigorous. Through well-governed procurement, we get savings. It has been one of the areas that the Ministry of Finance has been pushing hard to [strengthen] because while MoF doesn’t generate many tenders itself, it reviews several of these above a certain [value] threshold.

Stepping up governance is a big-ticket item for the government. That’s why the prime minister always stresses governance, governance, governance … because when you get it right, it will solve your problem.

That’s why the e-invoice is very powerful … It has triggered people who have never filed taxes before to do so ... If you buy a car, a house, jewellery, something worth RM10,000, we need your details, then data can be matched. The more we can make the shadow economy transparent, the better … There are lots of ways that we can do better to enhance revenue collection.

Can you tell us more about the powerful tool behind Budi95? You mentioned identifying people who didn’t renew their driving licence, and hinted at potential applications with cooking oil. What about those who haven’t paid their traffic summonses, PTPTN loans or taxes and so on?

The question is how do you tie it to something? When we tied RON95 to a valid driving licence, automatically, people [began renewing]. You can’t renew your road tax if you have outstanding [traffic] summons. So, it is those sorts of linkages and commonalities, also through Govtech, that the government is trying to iron out to make sure that people do not bypass their obligations. There’s a lot we can do using technology.

Does the money from driving licence renewals go back to MoF, or does it stay with the Ministry of Transport (MoT)?

Driving licence fees are collected through MoT [but] go back to the Consolidated Fund.

Budget 2026 mentions an AI-powered nation. What are your thoughts on suggestions that tax breaks be given for R&D spending and not just capital expenditure in strategic areas?

The government learns and understands things better over time and, when we feel there is a direct translation to growth, we will get it sorted. For example, in this year’s Budget, there is a mechanism that allows people who are in university to take time off to commercialise IP (intellectual property) developed by the university. The government is working with GLICs (government-linked investment companies) to support mid-tier companies so they have the funds to grow. Khazanah Nasional, through Jelawang Capital, is opening up many investments at earlier stages. What we need to do is create a stronger pipeline so that future companies can grow bigger.

The Petronas dividend is pencilled in at just RM20 billion for Budget 2026 — a notable drop from RM32 billion in both 2025 and 2024. Other institutions, such as KWAP and Bank Negara Malaysia, are contributing a bit more to investment returns. What are the other sources of investment returns? Are they sustainable and growing or are they more of one-off gains, such as the RM3 billion from the ownership transfer of Bintulu Port Authority?

Over the years, the government has been strategically trying to reduce dependency on oil-related income over time. A much more diversified economy is better for us and gives us a better revenue balance, because not all sectors will be up or down at the same time, right?

Last year, oil income to government revenue was just under 19%. So, next year, it’s below 13%. One reason is lower dividends. With Petronas, the most important thing that the government needs to do also is to make sure whatever [dividend] we agree on gives them enough capital to invest back into the business … Oil prices are presumed to be softer next year.

But the other way is making sure that other revenues grow faster. All the efforts that we’ve made so far have helped us build other revenues, so we can take the lower [Petronas] dividend … We always encourage other entities, whether Khazanah, KWAP (Kumpulan Wang Persaraan [Diperbadankan], or Retirement Fund Inc) to generate better yields. They’ve been doing quite well; so, returns are better.

But there are also a lot of MKD (Menteri Kewangan Diperbadankan, or Minister of Finance, Inc) companies that we are looking at again. Is there actually something that needs to be done to these companies? Do we need to release value by selling them outside in the market? Can they be optimised in a different form so that capital can be released or if some [assets] can be put out to the private sector because they may be a better engine than the government? So, these reviews are ongoing within MoF. We saw one [value unlocking], which is coincidental, under MA63 [1963 Malaysia Agreement]. The federal government got revenue coming back from that strategic decision.

What else contributed to the investment income?

Our sale of land in Bandar Malaysia to Petronas [is another example] of the different things that we can look at. The key thing was for the government to ask the question, and also for some of these entities to ask themselves whether we are the natural or best host for these entities. If we are not, then find a better host.

If it is something that we are naturally the best owner of, at the moment, say public transport because it’s still subsidised and because we want to make sure costs are lower, then we won’t put it out there [in the market]. But, we can also look at optimisation of the structures that exist in private LRT systems so that they can reduce dependency.

How big is this potential pool of assets that you can monetise and induce investments?

I don’t have a number that I can share with you at this point in time. Every year, we will look for opportunities, and I think there’s enough space for us. But more importantly for us is all the investments needed to translate into a revenue-generating capacity.

We have a new investment framework that is coming out by the end of this year that tweaks how we want to induce investment in the country, aligned with the NIMP (New Industrial Master Plan 2030) and JS-SEZ, to align everything back to the core strategies and frameworks. That is why the 13MP is still very relevant — it tells the government which are the priorities. For example, you can see in the Budget that housing is a priority. There are still a lot of people who don’t have adequate housing. The SKJP (Skim Jaminan Kredit Perumahan) home financing scheme helps first-time homebuyers in the informal sector.

What elements in Budget 2026, the 13MP and other programmes reflect Putrajaya’s desire to teach people to fish rather than just have the precariat staying dependent on handouts? Do the majority in Malaysia want to fish or is this just wishful thinking of armchair critics?

The simplest thing we are paying a lot of attention to is TVET (Technical and Vocational Education and Training), which had a very low penetration rate in the past but, this year and last year, we had a multifold increase in upward mobility. Post-TVET, employment levels are nearly 100%; so, it was worth the investment.

But what the government shifted was not just about giving support, but also structuring it as a viable long-term medium for people to aspire to. We are now connecting the dots to allow people who want to climb via the TVET ladder, perhaps into academia. Suddenly, the [upward] mobility of the individual grows. What the government is trying to do to increase economic complexity also needs to be supported by a matching talent pool.

The concept of grants in the government has changed quite a lot ... We now also want [recipients] to have alignment with goals. People don’t have as much responsibility with free money, but if money shifts from a grant to a soft loan, it changes to co-sharing. You get a bigger bang for the buck. That’s also where the government is getting smarter on how to encourage people to actually fish and not wait for handouts.

The M40 often feel like the neglected middle — too well-off to qualify for aid, yet struggling with the rising cost of living. How do you respond to this perception?

If you look at the creation of better opportunities for people to scale up, they’re targeted at M40, not necessarily only the B40 — slots available in universities, for example.

Do we take care of people who are in absolute poverty more than others? The answer should also be ‘yes’, because they are far more disadvantaged than everybody else, right? So, the government has made a big point in terms of making sure that we can address imbalances in the country. The latest Household Income and Expenditure Survey shows that the Gini coefficient of the country has dropped, which is a good sign. Median household income is up 5.1%, above average household income growth of 3.8%. That means the bulk of society is growing at a faster rate in closing the wage gap. Hardcore poverty has also fallen to 0.09% [in 2024] versus 0.2% in 2022 … so, intervention done correctly narrows the gap. The government is doing what it can to provide support in different forms, depending on need.

How are the 13MP and Budget 2026 preparing for an ageing society? The need for broader social safety nets is clear, especially given the low adequacy of EPF savings — a situation worsened by early withdrawals allowed at ages 50 and 55. What is the plan to address this, and can Putrajaya realistically push through the necessary reforms?

We have to do something for the ageing society or it is going to be a time bomb that catches up. From the retirement savings basis, the good thing is that EPF has been encouraging savings and the percentage of people in the formal sector who are attaining adequate savings [at various age thresholds] was 33%, but it is now 38% because we drove wages up. The increase in minimum wage to RM1,700 helped and we’ve encouraged voluntary savings. That helped to begin closing the gap but [old-age savings adequacy] will still take time to move up.

We need to look at how money is being withdrawn from EPF. At the moment, people can withdraw a lump sum, so a key question is whether a portion can be evolved into a monthly payout basis. Because pushback is quite high … We will only encourage, not force, people to convert. For new entrants, however, their money can move to this new scheme to spread over a longer period. It is going through the policy framing process; we will have to take it through normal consultations, get Cabinet and other approvals along the way. But this is one of the thought processes in laying down a different social protection instrument.

Are you referring to an annuity for EPF?

An annuity, in the past, didn’t work very well because of the design structure. But now EPF is looking at a different form where, if you die, you don’t burn all the money that you put inside, which was the main concern in the previous structure. Let them mature that way of thinking.

Second is to provide support with knowledge. In this Budget, we’ve given some funds to KPWKM (Ministry of Women, Family and Community Development) to support the development of care worker support mechanisms, [including] training grants, so that we can teach people to do care workers’ jobs. That allows people to age in place instead of moving to a retirement home, where a care concierge can go to their home. KWAP is investing in a retirement home mechanism, developed on waqf [Islamic endowment] land. We’re trying to create other mechanisms so that we can reduce the cost of retirement. With all these efforts, we’ll start to close the gaps. It is not an easy problem to solve overnight, but at least we are beginning to work towards that.

Having been in the job for nearly two years now, has anything changed in terms of your perception, assessment and views about policymaking from when you were heading a GLC/GLIC and when you first took on the very public and politically hot potato portfolio?

Everything is possible. You just have to set your mind, figure out how to balance the thought patterns inside the government, and you need to get support to make sure it gets done. Three years ago, if you had asked whether we could have done electricity, diesel, RON95, [the answer might have been different] but we’ve proven it can be done. But what did it need? Consultation, a lot of delicate effort to map and work it out … and it needed a lot of thinking about change management. We will follow the same thought pattern. If we can chip away at the problem, we move Malaysia bit by bit to the right space.

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