MBAM worries building costs may rise due to new tax and subsidies cut in Budget 2025

• The association is particularly concerned on how to improve supply chains and ensure the availability of key construction materials in 2025 as this is expected to help stabilise building costs and enhance project viability across the board.

KUALA LUMPUR (Oct 18): The Master Builders Association Malaysia (MBAM) has voiced concerns about supply chain and pricing trends for key construction materials as well as a potential rise in building costs in 2025, following the government's announcement of carbon tax and the removal of certain subsidies in Budget 2025 presented on Friday.

In a press statement, MBAM commended the government’s proactive measures in Budget 2025, which prioritises key infrastructure projects and underscores the critical role of the construction sector in driving Malaysia’s socio-economic development particularly in transportation and housing.

However, the association is particularly concerned on how to improve supply chains and ensure the availability of key construction materials in 2025 as this is expected to help stabilise building costs and enhance project viability across the board.

“It must be pointed out that the implementation of the Multi-Tier Levy Mechanism (MTLM), the increase of minimum wages from RM1,500 to RM1,700 and the revision of RON95 subsidy in mid-2025 will have an impact on the construction industry moving forward,” said MBAM president Oliver HC Wee. (pictured)

Wee also urged the government not to hurry on the implementation of the carbon tax in helping to stabilise the building industry.

“MBAM urges the government not to concentrate on the carbon tax now but instead should grant more incentives for such utilisation in order to encourage the industry to commit and move forward. Construction contract is a fixed price contract. Any removal of subsidies or changes in policy will impact contractors. We expect contractors to be more cautious as costs will be increasing.”

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