KUALA LUMPUR: Malaysia must strengthen its non-petroleum revenue base to reduce reliance on volatile oil income and ensure long-term fiscal sustainability, says Datuk Seri Hasni Mohammad (BN-Simpang Renggam).
He proposed strengthening the medium-term dividend framework to balance the government’s fiscal needs with PETRONAS’ ability to reinvest sustainably.
He also called for more effective reviews of government programmes, less duplication among agencies, more efficient procurement and greater digitalisation, alongside reassessing spending that no longer delivered commensurate benefits.
"The government should expand high-value economic activities, improve tax compliance and reduce revenue leakages to support its growing spending commitments.
"PETRONAS' dividend contribution was revised upwards from an initial RM20bil estimate for 2026 to RM27bil, while its projected contribution for 2027 was RM32bil," he said during the debate on Budget 2027 in the Dewan Rakyat on Wednesday (Oct 14).
While acknowledging PETRONAS’ significant contribution to national development, Hasni said the petroleum sector remained exposed to fluctuations in commodity prices, investment costs and energy transition.
"We should not finance increasingly permanent spending commitments by relying too heavily on revenue sources that can fluctuate," added Hasni, a former Johor mentri besar.
He said PETRONAS also needed sufficient funds to sustain investments, remain competitive and develop future capabilities.
On subsidies, Hasni acknowledged the government’s efforts to shield the public from rising energy prices but said fuel subsidies highlighted the scale of the fiscal risks that need to be managed.
"Good subsidies protect those who need assistance, but good economic policies should reduce their need to remain dependent on subsidies.
"Sound fiscal management would give the country greater room to respond to future economic downturns, disasters and global price shocks while continuing to protect the public," he said.
