SME Association of Malaysia national president Dr Chin Chee Seong said support should focus on helping businesses become more productive rather than simply introducing more grants, while also ensuring that the cumulative impact of rising costs and regulatory changes remains manageable.
Retailers are facing simultaneous cost increases, including higher wages, utility tariffs, commercial rents, logistics costs and the expansion of the Sales and Service Tax (SST), he said.
“While a resilient business might absorb a single cost increase in isolation, the simultaneous convergence of these pressures over a short timeframe is unsustainable, particularly for micro and small retailers operating on thin margins.
“This is precisely why we advocate for a comprehensive Cumulative SME Cost and Regulatory Impact Assessment, which will ensure that government policies and regulatory compliance costs are evaluated holistically rather than in silos,” he said.
Chin said Budget 2027 should prioritise managing cumulative policy costs through proper sequencing, including assessing how changes in statutory wages, utilities, taxation, commercial rents and compliance requirements interacted.
He also called for focused, outcome-based support for digitalisation, practical AI adoption, e-commerce and automation, rather than spreading public funds across fragmented schemes.
Instead of creating more grants, he said the government should focus on reducing operating costs through tax relief, providing faster and more suitable working capital and boosting domestic consumer spending, while helping retailers digitalise and improve productivity.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said retailers are also facing rising logistics, wage and raw material costs, regulatory compliance and bureaucracy, as well as intense competition driven by rapid technological changes.
While Malaysia’s macroeconomic conditions remain supportive, the benefits of economic growth are not being evenly distributed among households and businesses, he said.
“For starters, assisting the business via effective communication on policy changes and minimising the bureaucratic procedure will be the low-hanging fruit as this may not require sizable cash outlay from the government,” he said.
Afzanizam said the government should review existing procedures and ensure policy changes are implemented seamlessly, although coordination between ministries, agencies, state governments and local authorities remained a challenge.
He also called for a level playing field for local retailers and better access to capital and financing so businesses could invest in people and technology.
“The government can become a ‘partner’ to the local businesses so they will have a better chance to compete in the marketplace,” he said.
