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STR and SARA Should Not Become a Long-Term Lifeline, Economists Say

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STR and SARA Should Not Become a Long-Term Lifeline, Economists Say

Malaysia’s STR and SARA aid should offer temporary relief rather than become a long-term financial lifeline, economists say.

The government should focus on raising household incomes and improving living standards, according to economists interviewed by Bernama.

Their comments come as Malaysia increases its combined STR and SARA allocation to RM16 billion under Budget 2027, up from RM15 billion in 2026.

Bank Muamalat chief economist Mohd Afzanizam Abdul Rashid said education, healthcare and skills training could help families improve their economic circumstances.

He cautioned that excessive reliance on aid could weaken efforts to improve social mobility and potentially deepen inequality.

However, he acknowledged that some households may struggle to adjust after years of receiving assistance.

CGS International Securities Malaysia chief economist Nazmi Idrus said government aid helps address income disparities and ensures poorer families can afford basic necessities.

However, he questioned the need to provide assistance to everyone, citing the universal RM100 SARA payment.

Nazmi said sustained wage growth would help more households become financially independent.

He also suggested tying certain forms of income support to job searches or training programmes.

Despite his concerns about long-term reliance, Nazmi believes such assistance will remain necessary.

He suggested that higher taxes on wealthier individuals could help cover the cost.

Featured image: Edited by Fintech News Malaysia, based on image by Akbarunyam via Magnific



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