Budget 2027 is tabled on 9 October. At an engagement session with around 400 representatives, Anwar Ibrahim said the middle-income group is a priority.
"We have a list of priority areas to ease the burden, including for the M40."
Everyone says this before a budget. What's different is that there's a specific mechanism already running that tells you what "helping the M40" has meant in practice.
1. The thing that already happened
Since 2023, a two percentage point income tax reduction has applied to income bands between RM35,000 and RM100,000. Around 2.4 million taxpayers benefited. Maximum benefit per person: about RM1,300 a year in additional disposable income.
RM1,300 a year is roughly RM108 a month.
That's not nothing. It's also not a solution to anything, and the gap between how it gets announced and what it does to a household budget is where most of the frustration with M40 policy lives.
2. Why the M40 is politically awkward
Malaysian assistance policy is built around the B40. That's defensible. It's also created a group that earns too much for most support and not enough to feel secure, and that group has been paying for the subsidy rationalisation of the last few years without receiving much of the offset.
The M40 doesn't get Sara. It doesn't get most targeted assistance. It does get the full price of electricity, the full price of fuel, and school fees, car loans and a mortgage in a city where property has outrun wages for a decade.
3. The three stated priorities
Finance Minister II Amir Hamzah Azizan set out three:
Raising the ceiling. Competitiveness, investment, MSMEs.
Raising the floor. Public services, vulnerable groups.
Strengthening good governance. Regulation, digitalisation.
Look at that list and try to find the M40.
It isn't in the floor, because the M40 isn't the vulnerable group. It's in the ceiling, but only indirectly, via jobs that MSME competitiveness might eventually create.
Which is the honest structural answer. The M40 doesn't get helped by transfers. It gets helped by wage growth, and wage growth comes from the economy producing better jobs.
4. Which brings it back to the underemployment number
1.96 million skill-underemployed workers. Graduate underemployment at 35.5%. Young workers falling as a share of the labour force while the 35 to 44 bracket expands.
That's the M40 problem stated properly. Not a cost-of-living problem with a cost-of-living fix, but a wage problem caused by an economy that hasn't moved up the value chain fast enough to pay its graduates what their qualifications imply.
A RM108 a month tax adjustment does not touch that. Nothing in a single budget does.
5. Sara, and the tell
In late July, Anwar said he may consider increasing the Sara allocation because of higher living costs.
Sara is targeted assistance. Expanding it is the right thing to do and it is also, precisely, not M40 policy. If the M40 headline turns into a Sara expansion at tabling, that's the signal that the middle got a mention rather than a measure.
6. What to actually watch on 9 October
Three things.
Tax band adjustment. Whether the RM35,000 to RM100,000 relief widens or deepens. This is the direct lever and the easiest to announce.
MSME automation financing. Malaysia wants foreign labour down to 10% by 2030 and automation costs an MSME RM500,000 to RM1mil. If there's serious long-tenor financing here, it's a real industrial policy. If it's a grant scheme with a small ceiling, it isn't.
Public transport operating subsidy. Anthony Loke has effectively argued for it. Capital grants build lines. Operating subsidy is what makes the fare survivable.
An election budget, most likely. Which means the announcements will be generous and the question is whether any of them compound.
Sources: M40 to be key focus of Budget 2027, The Star, 19 August 2026; Budget 2027 to be tabled in early October, says PM Anwar, The Star, 23 July 2026; PM says may consider increasing Sara allocation in Budget 2027, The Star, 29 July 2026.