THIS article highlights several key aspects that should be addressed in Budget 2025, including women’s workforce participation, targeted fuel subsidies, the promotion of electric vehicles (EV), e-invoicing and the economic outlook for the ringgit.
Boosting women’s workforce participation
Associate professor at TAR UMT Dr Foo Lee Peng highlights a pressing need to support women re-entering the workforce, particularly those who have paused their careers for family responsibilities.
She said Budget 2025 presents a critical opportunity to address the challenges many women face in balancing family life with work. Foo hopes the government prioritises flexible work arrangements, affordable childcare facilities and targeted reskilling programmes.
She also advocated for tax incentives to encourage employers to adopt family-friendly policies, aligning with the Madani Economy’s aim of increasing women’s workforce participation to 60%.
“Empowering women to return to work after career breaks is not just about addressing gender disparity, it is also about building a more inclusive and resilient economy. It is a win-win for women and the nation’s growth,” Foo added.
Targeted fuel subsidy and EV promotion
Shifting her focus to energy policies, Foo supports the targeted fuel subsidy mechanism proposed in Budget 2025, which aims to alleviate the financial burden on lower-income groups.
However, she emphasised the importance of efficient implementation. “Success will depend on avoiding leakages and ensuring the subsidy reaches those who need it. While it could help the government reduce fiscal pressures which currently cost it between RM15 billion and RM20 billion annually. Careful management is crucial during the transition to prevent market disruptions and price fluctuations that could impact the people,” she highlighted.
In tandem with the fuel subsidy, Foo also praised the government’s initiative to promote EV, describing it as a “positive step towards reducing dependency on fossil fuel”.
“The inclusion of incentives for EV adoption, such as tax exemptions and support for charging infrastructure, is a positive step towards a greener economy. It complements the targeted oil subsidy by encouraging a gradual shift towards cleaner energy sources while still providing support to those who need it most during the transition.
“However, the promotion of EV must be aligned with broader infrastructure development to ensure accessibility and affordability for the wider public,” she added.
E-invoicing: Push towards digitalisation
Malaysia’s push towards digitalisation is reflected in the introduction of mandatory
e-invoicing, a policy Foo sees as a significant step forward.
“The move to e-invoicing enhances transparency and tax compliance, aligning
with broader goals of digitalisation. It is crucial for improving the efficiency of tax collection, thus helping to reduce the informal economy,” she said.
However, she underscores the need to support businesses, particularly small and medium enterprises (SME), in adopting this new system.
“For e-invoicing to succeed, the government must consider the readiness of SME and provide sufficient training and resources to ensure a smooth transition,” Foo advised.
With e-invoicing set to be mandatory for businesses with revenue exceeding RM100 million already implemented since August, followed by full implementation in 2025, this policy is expected to reshape the way businesses handle transactions in the coming years.
Economic outlook and the ringgit
Turning to Malaysia’s broader economic landscape, Foo reflected on the challenges of the Malaysian ringgit.
“Malaysia’s economic growth remains under pressure from external and domestic challenges, including global economic uncertainties and shifting monetary policies. The ringgit has faced volatility, partly due to interest rate differentials between Malaysia and major economies like the US.
“Budget 2025’s efforts to boost domestic consumption and investment are expected to support economic resilience, but a sustained recovery of the ringgit will depend on improvements in export performance, stronger investor confidence, and stability in the global financial markets,” she noted.
Despite these challenges, Foo remains optimistic that Budget 2025’s strategies, if effectively implemented, can strengthen the economy.
“With the right policies in place, Budget 2025 can address these critical issues and pave the way for inclusive growth that benefits all Malaysians,” she concluded.
This article is contributed by Dr Foo Lee Peng, associate professor at TAR UMT,
Department of Economics and Corporate Administration and chairperson of the Centre for Business and Policy Research,
Faculty of Accountancy, Finance and Business. She is one of the 15 economists appointed to the 15th Parliamentary Special Select Committee on Finance and Economy.
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