Prime Minister Anwar Ibrahim’s Budget 2026, worth RM419.2 billion, is smaller than 2025 but is packed with handouts and cost-of-living measures. The usual questions accompanied the unveiling of the budget. “What’s in it for me?”, “Will I get anything out of it?”, “Will the poor get poorer, and the rich richer?”, “How will the middle-class fare?”, “How will subsidies and food poverty levels affect me?”.
Malaysia’s 1.6 million civil servants are almost always treated differently from the remaining 31 million population. How could Anwar forget? Most Malaysians will be blunt and say that what Anwar fears most is sabotage by the civil servants.
Source: https://www.dagangnews.com
Many economists call Budget 2026 a “maintenance budget”, which plays it safe and focuses on sustaining existing programmes and services. There are no bold reforms or new initiatives. The “maintenance culture” approach is seen in the Operating Expenditure, with RM338.2 billion allocated for operating expenses, a 1.8 percent increase from the previous year. Significant portions are directed towards public service salaries (emoluments), debt servicing, and pension payouts. This budget is “locked in” to existing obligations.
To further illustrate the budget’s “maintenance culture”, a RM2.5 billion allocation is to maintain federal roads, install streetlights, and road furniture. RM5.6 billion has also been allocated for the maintenance of state roads nationwide, and another RM30 million will be used to expedite minor repairs at the district level.
Vulnerable groups like the poorest households (B40) will receive more targeted help, in the form of the Rahmah Cash Aid (STR) and Sara Food Aid, with free education thrown in. Allocations for education, healthcare, and technical and vocational education and training in Malaysia have also been increased. Civil servants and retirees will receive small one-off payments - RM500 and RM250 respectively.
Top priorities are in healthcare and education,
with allocations of RM46.5 billion and RM66.2 billion, respectively. The
“maintenance budget” promises to upgrade public health infrastructure for
medical facilities, including access to affordable healthcare. An allocation of
RM1.2 billion will be for maintenance and repair of hospitals and clinics
across the country, alongside a further RM755 million for upgrading or
replacing outdated medical equipment. Continuing with this “maintenance budget”
2026, a RM2 billion allocation is to upgrade over 520 dilapidated schools,
primarily in Sabah and Sarawak, and at the same time, repair and maintain
various types of schools, including student facilities and teachers’ rooms.
Malaysians in the private sector are unhappy. The B40 are given handouts, and with fuel, electricity, and certain food products projected to cost more, once universal subsidies are removed, the middle class will be squeezed further with inflation and stagnant wages. Civil servants, retirees, and veterans are well provided for, as is another group of people who will never lose out - the MPs with their guaranteed pensions.
Protection for Proton and Perodua continues. EVs of
other car makers will be impacted in 2026. Why can’t he propose a gradual
removal of “subsidies” to the national cars? If he wanted higher revenue, he
could do 2 or 3 new or revised taxes on:
·
Impose a forex transaction tax
at 0.1% of daily transaction volume – that will generate RM20m a day!
·
Increase “sugar” tax on
those drinks that will impact diabetes; and
· Have a “Fast foods” tax – to reduce consumption of unhealthy foods.
But alas he played safe! In short, Budget 2026 protects the poor, squeezes the middle class, while the rich remain relatively untouched.
Reference:
Budget 2026 cushions the poor, squeezes the middle, Mariam
Mokhtar, Malaysiakini, 12 October 2025
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