Malaysian PM Muhyuddin passes leadership test in final budget vote

The result could signal firmer footing for Muhyiddin, whose eight months in office have been beset by infighting in his ruling coalition and a leadership challenge from opposition leader Anwar Ibrahim, just as the country grapples with the economic and health crises caused by the coronavirus pandemic.

Parliament voted 111-108 to approve next year's budget, a record 322.5 billion ringgit ($79.61 billion) of spending aimed at spurring economic activity.

The benchmark KLSE closed 0.68 per cent higher after the budget vote, while the ringgit was little moved.

Muhyiddin had also avoided a potential political crisis last month, after the opposition backed down from a plan to vote down the budget at the end of the policy stage debate.

A defeat would have signalled a loss of confidence in Muhyiddin's leadership, possibly triggering snap polls.

Tuesday's vote also dents Anwar's bid for the premiership, after he declared in September he had secured a strong majority in parliament to form a government and replace Muhyiddin.

Two opposition sources on Monday said Anwar believed he had secured 113 lawmakers to defeat the budget at the final stage, including up to 10 members from the United Malays National Organisation (UMNO) former ruling party led by party president Ahmad Zahid Hamidi and former premier Najib Razak.

Anwar and Najib's offices declined to comment, while Ahmad Zahid's representative did not have any immediate comment.

Anwar has for months been rumoured to be holding talks with UMNO leaders, but Tuesday's failure to defeat the budget means he will need to rethink his strategy, some analysts said.