KUALA LUMPUR, Jan 21 — DAP’s Lim Guan Eng has backed the motion to endorse the King’s speech in the Dewan Rakyat, while raising concerns that Malaysia’s planned knowledge economy may be developing into a K-shaped two-tier economy.

Speaking in Parliament during the motion, Lim said the King’s speech, presented by the Member of Parliament for Simpang Rengam and supported by the Member of Parliament for Kota Melaka, should be respected as part of Malaysia’s constitutional monarchy system.

Lim said the Malaysia Education Blueprint 2026-2035 (RPM 35), announced by the Prime Minister on Monday, was an immediate response to the King’s call to improve education quality and strengthen Malay language proficiency.

He said he would leave it to his party leadership to confirm whether RPM 35 aligned with DAP’s aspirations and the Pakatan Harapan manifesto in GE15.

Although his proposal to restore UPSR and PT3 was not adopted and was instead replaced with a new assessment system for Year Four and Form Three, Lim said the ministry should be given time to evaluate its effectiveness, with student outcomes as the main measure of success.

He cited the Prime Minister’s emphasis that education reform must be more than a shift — it should be a leap that improves Malaysia’s PISA ranking, which measures basic reading, mathematics and science skills among 15-year-olds.

He said education must also strengthen STEM learning to produce enough engineers and scientists to master new technologies and artificial intelligence.

Lim said Malaysia should not fall behind countries such as Vietnam in PISA scores and engineer density, and said merit and education standards should not be compromised by emotion without supporting data and knowledge.

He said examinations remain an important benchmark of academic performance and excellence, and welcomed the decision to increase public university intake from 1,500 to 3,000 for STPM graduates and high-performing students.

Lim said he hoped Education Minister Fadhlina Sidek and Deputy Minister Wong Kah Woh would implement education reforms under RPM 35, aligned with the RM66.2 billion allocation in Budget 2026.

He then turned to the economy, saying the government had outlined a knowledge economy focused on innovation, research and development, technology and skilled human capital. However, he questioned whether Malaysia was instead experiencing a K-shaped economy.

Lim congratulated the government for Malaysia’s 4.9 per cent economic growth in 2025, inflation at 1.6 per cent in December 2025, unemployment at 2.9 per cent — the lowest since 2014 — the ringgit strengthening to RM4.06 per US dollar, and Bursa Malaysia reaching a six-year high above 1,700 points but pointed out that the strong economic performance was not being felt by the wider public and was largely enjoyed by high-income groups and specific sectors such as high technology and AI.

Lim said this reflected a two-tier economy where economic gains do not translate into improved cost of living for households or small businesses.

Lim said he hoped the Finance Ministry would provide data on the extent of the K-shaped economy in Malaysia.

He then presented a series of fiscal and financial proposals to address the two-tier economy and ease the cost of living.

Among the proposals, Lim urged the government to allocate 10 per cent of Bumiputera development funding to non-Bumiputera groups without reducing existing Bumiputera allocations, saying non-Bumiputera communities were facing economic difficulties not seen since the 1998 Asian financial crisis.

He also called for a review or freeze of the expanded Sales and Services Tax (SST) scope introduced on July 1, 2025.

Lim said the government should require 50 per cent of essential goods to be sourced from local manufacturers and impose SST on imported and local iron ore, metallurgical coking coal and coke, while abolishing SST on steel scrap to protect local industry.

He suggested that micro, small and medium enterprises (MSMEs) should be exempted from e-invoicing, or the threshold raised to RM5 million annual revenue.

He called for a special tax tribunal for individuals and MSMEs to ensure fairness, and proposed freezing the 2 per cent EPF contribution for foreign workers and a 2 per cent dividend tax on income exceeding RM100,000 for non-Bursa Malaysia companies.

Lim also urged a reduction of corporate tax for MSMEs to 15 per cent without limits, and cancellation of CP500 instalment notices for employees who already pay monthly tax deductions.

He said the government should pay 2 per cent annual compensation for delayed tax refunds, which he estimated to be about RM2 billion, under Section 111D of the Income Tax Act.

Lim called for the cancellation of transfer pricing tax enforcement estimated at RM10 billion under Section 140 of the Income Tax Act for MSMEs, while easing enforcement for other companies.

He proposed raising individual tax relief from RM9,000 to RM12,000, and increasing each personal tax deduction by RM1,000 to address rising living costs.

Lim also said the process for foreign worker applications should be simplified through comprehensive digitalisation and online processing, including employer interviews conducted online to improve efficiency and reduce corruption.

He said these proposals could improve prosperity and reduce the cost of living, which in turn could boost tax revenue and help address the K-shaped economy.

Lim concluded that the measures could help Malaysians live better compared with the past.