Malaysia's Prime Minister Muhyiddin Yassin

Malaysia's Prime Minister Muhyiddin Yassin (second from right) arrives for the virtual meeting at the online APEC leaders' summit in Kuala Lumpur on November 20, 2020. (Photo: Mohd Rasfan, AFP)

Malaysia’s 2021 Budget Passed: Muhyiddin Lives to Fight Another Day


Despite opposition from within and without, the Perikatan Nasional coalition has passed Malaysia’s 2021 Budget on the second reading. Prime Minister Muhyiddin Yassin, however, will still face considerable turbulence going forward.

Against all expectations, Malaysia’s Parliament passed the country’s 2021 budget on the second reading. Following Finance Minister Tengku Zafrul Aziz’s speech to conclude the debate on the budget, Parliamentary Speaker Azhar Harun called for a voice vote. In such a vote, a measure is approved or rejected by MPs calling out their support or disapproval. The Speaker was satisfied that there were more MPs in favour of the budget and announced that it had passed its second reading. Such a modality poses a lower bar than a bloc vote, where the number of parliamentarians for or against a measure are counted.

While the budget still has to pass a third and final reading scheduled for December 15, this latest development brings Prime Minister Muhyiddin Yassin’s Perikatan Nasional (PN) administration a step closer to pushing the budget through.

The stakes for Muhyiddin are high. First, at RM322.5 billion, the 2021 budget is Malaysia’s largest ever, and is the centrepiece of his administration’s Covid-19 response. In line with Malaysia’s Westminster tradition, a rejection of the bill would have been tantamount to a loss of confidence in Muhyiddin’s administration. Had the budget bill been defeated, he would have had to resign or request the King to dissolve parliament and call for fresh elections.

At present, the PN administration has the slimmest of majorities. It has 112 in its ranks, against the opposition’s 108. It would only have taken a few no-shows or displays of dissent from government MPs to block the budget and topple the PN government. The previous debates around the structure and content of the budget also showed that there was dissension, both within PN and from across the floor. Sensing Muhyiddin’s vulnerability, a number of aspiring leaders saw blood in the water and sought to capitalise on this. Yet, conscious of the King’s appeal to parliamentarians to unite to pass the budget, they did not want to appear too eager to tip the apple-cart.

Now, as before, Muhyiddin must spend as much time repairing fissures within the coalition, as parrying attacks from the opposition.

While all ministers and deputy ministers within the PN coalition supported the budget regardless of their party affiliation, there were criticisms of the budget from both sides of the floor. In a refreshing change of tone, the debates were technical and centred on policy matters such as the ability of the public to access funds in their retirement accounts, the tenure and extent of loan moratoria, and the budget for a government agency tasked with communication and outreach. That said, much of the differences over the form and content of the budget were a reflection of deeper-seated divisions.

For example, former Prime Minister Najib Razak stated that his party, the United Malays National Organisation (UMNO) would only support the budget if it was amended to increase the withdrawal limits for the Employees Provident Fund and extend the loan moratorium to embattled firms by six months. While sounding very reasonable, the logic behind this is to play up Najib’s profile and highlight UMNO’s commitment to the population – quite independent of the PN coalition. Currently, UMNO has the largest number of MPs in PN.

From the other side of the floor, Pakatan Harapan (PH) MPs criticised Finance Minister Zafrul Aziz for failing to consider the inputs put forward by opposition parliamentarians, most of which sought to increase government expenditure for tackling the economic and public health impact of the Covid-19 pandemic. For instance, PH called for fair compensation of medical frontliners and the procurement of vaccines for the most-at-risk population, coupled with a monthly RM1,000 welfare aid for the vulnerable and unemployed until the pandemic subsides.

In the end, opposition MPs were hamstrung by their unwillingness to go against the King’s wishes and the urgency of passing the budget. Parti Amanah Negara (Amanah) MP Muhfuz Omar requested for a bloc vote, but his motion was defeated as it failed to gain the minimum threshold of 15 MPs for the vote to be carried out.

Malaysian news outlets reported that PH’s decision to support the budget came at the eleventh hour, and was made by PKR president Anwar Ibrahim. He stated after the proceedings that he chose not to oppose the budget at this stage as Finance Minister Zafrul had made concessions to increase “allowances for frontliners, farmers, fisherfolk.” PH did not want to counter these measures. He stressed however that PH remains opposed to the budget and will raise their concerns at the committee stage starting next week.

Despite the budget’s passing of the second reading, Prime Minister Muhyiddin has merely survived the day (or week to be more precise) without achieving a conclusive victory. Given that the second reading was passed through a voice rather than a bloc vote, it disguises the extent of support for Budget 2021 among PN MPs. In particular, given the significant resistance towards Budget 2021 among certain UMNO MPs, there still remains a possibility that they will vote against the budget during the committee stage or in the third reading. PH has commented that it will reject the budget allocation for the Special Affairs Department (JASA) when the budget for Communications and Multimedia Ministry reaches the committee stage. JASA was perceived to serve as the government’s propaganda arm during the tenure of Barisan Nasional.

Now, as before, Muhyiddin must spend as much time repairing fissures within the coalition, as parrying attacks from the opposition. The embattled leader has lent new meaning to the phrase hanging on by one’s fingernails. For now, however, he will live to fight another day.


Francis E. Hutchinson is Senior Fellow and Coordinator of the Malaysia Studies Programme, ISEAS – Yusof Ishak Institute.

Kevin Zhang is a Senior Research Officer, ISEAS – Yusof Ishak Institute.