The Finance Ministry has assured that expenditure adjustments by ministries and government agencies will be implemented without compromising critical public services or the nation’s economic stability.
In a statement issued today, the ministry clarified that agencies have been directed to restructure their operating expenditure priorities.
This decision comes as a response to mounting pressures from the global supply crisis and a significant increase in subsidy costs.
Prudent fiscal management
The ministry described the move as part of a prudent fiscal management approach designed to optimise government resources. The primary goal is to ensure that assistance to the rakyat can be maintained on a sustainable and ongoing basis.
Government spokesman Fahmi Fadzil confirmed today that the move aligns with the administration’s broader plan to rationalise programme activities. He noted that during today’s Cabinet meeting, Prime Minister Anwar Ibrahim stressed that all official events, workshops, and large-scale programmes must be conducted on a moderate scale.
This directive is far-reaching, applying to all ministries, agencies, statutory bodies, government-linked companies (GLCs), and government-linked investment companies (GLICs).
Impact of global energy prices
The Treasury has reportedly instructed all ministries and agencies to reduce their operating budgets for the current year, citing the economic impact of the ongoing conflict in the Middle East.
According to a directive issued today by Treasury Secretary-General Johan Mahmood Merican, a sharp increase in energy prices resulting from the conflict has directly impacted the cost of living. This surge has placed an unexpected burden on the national coffers.
Rising subsidy projections
The Treasury document revealed that the government’s total subsidy bill is now projected to reach RM58.4 billion this year. This figure is significantly higher than the RM15 billion initially allocated under the 2026 Budget.
By identifying and reducing non-essential operating costs, the government intends to manage this massive fiscal gap while shielding the public from volatile global energy markets.
Despite these cost-cutting measures, the administration remains committed to ensuring that the core functions of the government and the delivery of help to those in need are not interrupted.
