BY TENGKU NOOR SHAMSIAH TENGKU ABDULLAH
KUALA LUMPUR: Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim today tabled Malaysia’s Budget 2026, outlining a sweeping plan for national renewal under the Ekonomi MADANI framework that seeks to balance fiscal responsibility with social justice, innovation, and sustainable growth.
Carrying the theme “Belanjawan MADANI Keempat: Belanjawan Rakyat” (The Fourth MADANI Budget: The People’s Budget), the 2026 Budget represents the fourth under the MADANI Government and the first aligned with the 13th Malaysia Plan (RMK13).
“This Budget is not merely about numbers. It is a moral statement, a historical pledge, and a covenant between the government and the rakyat,” Anwar declared in Parliament.
Fiscal Discipline and Reform Continuity
Total federal expenditure for 2026 is set at RM470 billion, comprising RM338.2 billion in operating expenditure, RM81 billion for development, RM30 billion from government-linked investment companies (GLICs), RM10 billion in public-private partnerships, and RM10.8 billion from statutory bodies.
Malaysia’s economy is forecast to expand between 4.0% and 4.5% in 2026, supported by resilient domestic demand, investment, and moderate inflation. The fiscal deficit is expected to narrow further to 3.5% of GDP, continuing the fiscal consolidation trajectory under the Public Finance and Fiscal Responsibility Act (FRA).
Revenue collection is projected at RM343.1 billion, up from RM334.1 billion this year. The Government Procurement Bill will be tabled alongside stricter anti-corruption enforcement, while agencies such as MACC, PDRM, and Customs — which have collectively recovered RM15.5 billion in misappropriated funds — will receive RM700 million to enhance institutional capacity.
Welfare and Targeted Subsidy Reform
The government will save RM15.5 billion annually through targeted subsidy rationalisation involving diesel, RON95 fuel, and electricity tariffs, redirecting funds toward social programs under Ikhtiar MADANI Untuk Rakyat, Kampung Angkat MADANI, and Solar MADANI.
The Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) programs, benefiting nine million recipients, will be expanded in 2026 with a combined allocation of RM15 billion.
Recipients will receive up to RM4,600 per household annually — combining STR (RM2,200) and SARA (RM2,400) payments. Additionally, 22 million Malaysians aged 18 and above will receive a RM100 SARA payment in February ahead of Ramadan and Chinese New Year.
“The well-being of the people is the highest law,” Anwar said, quoting classical philosophy as he announced the largest direct cash assistance in Malaysia’s history.
The Payung RAHMAH initiative to curb living costs will receive RM1 billion, including RM600 million for nationwide affordable sales programs.
Agriculture, Food Security and Rural Infrastructure
Agriculture and food security will receive a significant boost through RM2.62 billion in subsidies for paddy farmers — the highest in history — covering fertiliser, seed, and price support. Farmers will now receive approximately RM4,300 per hectare per season.
Other measures include:
RM1.28 billion Jeniang Water Transfer Project,
RM100 million modern paddy infrastructure fund, and
RM20 million for foliar fertiliser distribution to 6,400 farmers.
For fishermen, RM160 million is allocated for living allowances and catch incentives, alongside RM20 million to modernise fishing vessels.
The government also allocated RM3.3 billion for rural infrastructure, including RM2.5 billion for village roads, RM700 million for electricity and clean water access, and RM90 million for bridges and solar street lighting in rural Sabah and Sarawak.
Borneo Development Commitment
Sabah and Sarawak remain major beneficiaries, receiving RM6.9 billion and RM6 billion respectively — the largest ever federal allocations — alongside RM600 million special grants each.
Infrastructure projects include the Pan Borneo Highway, Sarawak–Sabah Link Road, Trans Borneo Highway, and RM2 billion SALAM undersea cable to strengthen energy and digital connectivity.
Economic Transformation and Green Transition
Under Tekad Lima and RMK13, Malaysia aims to reposition its economy for the high-value, green, and digital age.
Highlights include:
RM200 million Strategic Co-Investment Fund for SMEs,
RM180 million Industrial Development Fund under the New Industrial Master Plan (NIMP),
RM500 million E&E Financing Facility,
RM750 million KWAP–Khazanah Venture Fund, and
Tax incentives for AI, cybersecurity, and ESG-driven industries.
Malaysia will introduce a carbon tax in 2026, starting with steel and energy sectors, supported by a RM150 million National Energy Transition Fund, RM6 billion solar projects (LSS6), and RM1 billion GTFS 5.0 green financing.
The Prime Minister confirmed that Microsoft (USD2.2 billion) and Google (USD2 billion) will invest in AI infrastructure, supported by the National AI Office, AI Faculty at UTM, and AI Cloud Infrastructure worth RM2 billion.
Social Protection and Labour Reform
The i-Saraan Plus scheme will provide matching contributions of up to RM600 per year for gig workers and self-employed individuals, while the i-Suri age limit is raised to 60 years.
The Gig Workers’ Act 2025 mandates SOCSO contributions, with the government subsidising 70% of first-year contributions.
Public Sector and Civil Service
The long-awaited Civil Service Remuneration System (SSPA) Phase 2 will take effect in January 2026, involving an additional RM18 billion in salary adjustments.
A RM500 special aid will be paid in March 2026 to civil servants Grade 56 and below, while pensioners and veterans will receive RM250.
Housing and welfare measures include:
RM2.2 billion for quarters maintenance,
RM1 billion housing guarantee via SJKP for contract officers,
RM500 million BSN financing fund, and
RM500 allowance for 4,000 retired KEMAS staff.
Judges’ salaries will rise by up to 30% beginning January 2026, while Cabinet members will continue their 20% pay cut.
Defence, Security and Disaster Preparedness
The Defence Ministry receives RM21.7 billion and the Home Ministry RM21.2 billion, with RM6 billion allocated for new military assets, including two Multi Role Support Ships and air defence systems.
Another RM1 billion is for PDRM and enforcement agencies, with RM1.5 billion for new facilities including Maritime bases in Kudat, Labuan, and Tok Bali.
In disaster preparedness, RM2.2 billion will fund 43 high-priority flood mitigation projects, and RM460 million is allocated to NADMA for emergency response, including 10 new sanitation complexes at evacuation centres.
Education, Health and Housing
Education and healthcare dominate social spending:
RM66.2 billion for the Education Ministry,
RM18.6 billion for Higher Education, and
RM46.5 billion for Health.
Healthcare priorities include new cancer centres, Hospital Sultanah Aminah 2 (Johor), and 13 new health clinics, with RM1.2 billion for hospital upgrades and RM755 million for new medical equipment.
The MySalam insurance scheme will continue, while ETAP allowances for on-call doctors and specialists will rise by 40% from Oct 1, 2025.
Housing initiatives under the Kota MADANI framework include 10,000 smart green homes in Putrajaya, RM672 million for People’s Housing, and RM500 million for rebuilding 3,300 dilapidated homes.
Empowering Women, Youth, and Marginalised Groups
RM230 million for Amanah Ikhtiar Malaysia (AIM) with near-100% repayment rate,
RM270 million for women-led MSME financing,
RM250 million for National Service Training 2026,
RM200 million by Khazanah for youth skills programs, and
RM412 million for Orang Asli empowerment.
For the disabled (OKU), RM1.4 billion is allocated, including a new Autism Service Centre in Sabah and Sarawak and 100 mobility vans for accessible transport.
Closing Vision
Concluding his two-hour address, Anwar invoked both classical wisdom and poetic conviction:
“True greatness is not measured by wealth, but by the courage to uphold trust for the nation.”
Budget 2026 — he said — charts Malaysia’s course to grow greener, govern cleaner, and compete smarter, reflecting moral conviction, disciplined governance, and inclusive prosperity for all.
TNS NEWS
