The Madani Government seems so desperate to do the following:
1. Raise electricity tariffs from1 July 2025.
2.
Increase
port charges by up to 30%, also starting 1 July 2025.
3.
Expand
the sales tax to cover 97% of all goods and impose service tax on education,
healthcare, beauty, finance, rentals, and industrial sectors — even fruits,
salt, raw sugar and seawater are now taxed; all starting 1 July 2025.
4.
Maintain
Petronas’ RM32 billion dividend payouts — same as last year — even though
Petronas profits have plunged by 32%, forcing them to retrench over 5,000
employees and freeze all promotions and new hiring until end-2026.
5.
Implement
the Stamp Duty Act, 1949 for all contracts; and
6.
Planning
to hike RON95 fuel price in the second half of 2025.
The answer is probably “blowing in the wind” (not the Bob Dylan song) but Madani has failed to manage the economy and national debt responsibly. Let’s look at some its actions thus far:
(i)
Revenue,
Spending & Deficit (Jan–April)
Government
Revenue:
• 2022 - RM82.0
billion (Q1 still under lockdown, economy reopened in April)
• 2023 - RM98.6 billion
• 2024: RM93.2 billion
• 2025: RM97.1 billion
Even with multiple new and expanded taxes (LVGT, CGT, dividends, SST widening),
revenue in 2024 and 2025 is still lower than in 2023.
That means the economy isn’t growing fast enough to generate more tax income or
are there leakages?
Next, Government Spending has been on the rise:
• 2022: RM116.5 billion
• 2023: RM122.8 billion
• 2024: RM133.2 billion
• 2025: RM127.8 billion
And the overall budget deficit remains sticky:
• 2022: -RM34.4 billion
• 2023: -RM24.1 billion
• 2024: -RM40.0 billion
• 2025: -RM30.7 billion
The deficits in 2024 and 2025 are worse than in 2023, despite extraordinary
one-off support in 2024:
• KWAP dividend: RM5 billion (vs forecast RM3 billion)
• BNM dividend: RM5.25 billion (vs RM2 billion)
• RM2 billion from amendments to the Unclaimed Monies Act
• RM2 billion early payment from Petronas for the Bandar Malaysia land deal
Apart from the final RM4 billion payment from Petronas, most of these revenue
windfalls will not recur in 2025.
(ii) Government Debt and
Debt-to-GDP Ratio
As of 16 June 2025, the government has already borrowed a net RM64.28 billion —
that’s 79.4% of the RM81 billion debt limit set in Budget 2025, even though
only 45.8% of the year has passed.
This means that either they have to cut spending drastically or squeeze the
rakyat further to raise more taxes — quickly — because there’s only RM16.7
billion in borrowing room left for the rest of 2025.Due to stagnant revenue and
rising spending, government direct debt has soared:
• Nov 2022: RM1.071 trillion
• Jun 2025: RM1.305 trillion
• That’s an increase of RM234.2 billion in just 30 months of Madani.
Debt-to-GDP ratio has also surged from 60.3% to 65.5% by Q1 2025. This shows
that debt is rising faster than economic growth. If GDP were truly expanding in
a healthy way, this ratio should be going down - not up.
(iii) Government Debt Servicing
Costs (Interest Only)
• 2022: RM41.3 billion
• 2023: RM46.1 billion
• 2024: RM49.8 billion
• 2025: RM54.7 billion
With an
additional RM81 billion in borrowing for 2025, interest payments in 2026 are projected
to hit RM63 billion. That’s an increase of RM21.7 billion in annual interest
payments in just 3 years — and this is just interest, not even principal
repayment. In 2017 under Najib, the total annual debt servicing cost was only
RM28 billion.
Bottom Line: Is Madani Squeezing the Rakyat to Cover Their Own Failures?
To preserve their budget targets, slow the debt spiral, and fund ballooning
interest payments, the Madani government will continue extracting from the
rakyat — through every possible means — to cover up three years of economic
mismanagement. When you don’t know how to run a country, everyone else will pay
the price.
As a responsible Government, one
would present a reduction in operating expenditure and arrest leakages. Then
only attempt to introduce less controversial taxes. But no, they insist on
induced inflation especially with tariffs still not sorted. Why can’t you do
the Tobin tax (for banks), widen the excess profit tax and increase the “sugar”
tax?