KOTA KINABALU, Oct 19 — Prime Minister Datuk Seri Anwar Ibrahim said today that his government retained subsidies on essential goods in Budget 2025, acknowledging the public’s reliance on such assistance.

Anwar, who is also the finance minister, noted that while subsidy rationalisation exercises are often "grossly unpopular,” especially for a new government, they are necessary to manage fiscal constraints.

"Look at sugar, flour, rice, petrol — the prices for these items are substantially lower compared to our neighbours. But should we burden the people by increasing prices?” he said during his speech at the Sabah Blue Economy Conference today.

"Although necessary, we should avoid placing additional burdens on the people,” he added.

Anwar pointed out that while Malaysia’s inflation rate remains one of the lowest in the region at less than two per cent, any price increase still weighs heavily on farmers and workers whose wages have not risen accordingly.

"That’s why I made the bold decision for the largest-ever salary increase for civil servants,” he said.

In Budget 2025, tabled yesterday, Anwar announced targeted cuts to fuel and education subsidies for the top 15 per cent of the population.

He also revealed allocations of RM6.7 billion and RM5.9 billion in development funds for Sabah and Sarawak, respectively.

Anwar said that while Sarawak’s section of the Pan Borneo Highway is nearing completion, Sabah’s portion requires further work.

"A bit more push is needed in Sabah. But take note that yesterday’s budget marked the highest-ever allocation for the state.

"Will it solve all the issues — hospital and school conditions, for example? Maybe, but it is a bold attempt. We will continue to push forward. Your task now is to ensure its efficient and transparent implementation.

"We don’t want delays or losses due to commissions and corruption. It is your responsibility to make sure it works,” he said.