Prime Minister and Finance Minister Anwar Ibrahim today tabled the 2026 National Budget in Parliament, totalling RM419.2 billion. This allocation, representing 19.7% of the gross domestic product (GDP), reflects a 1.7% increase from the revised 2025 budget. The budget breaks down into RM338.2 billion for operating expenditure (80.7% of the total) and RM81 billion for development expenditure.
Anwar highlighted additional funding streams, including RM30 billion in investments from government-linked investment companies (GLICs), RM10 billion from public-private partnerships, and RM10.8 billion from federal statutory bodies and MoF Inc. These measures aim to bolster economic resilience while addressing the needs of ordinary Malaysians in a challenging global landscape.
Education and Skills Enhancement
Education receives the largest slice of federal spending at RM64.1 billion, underscoring the government’s commitment to human capital development. Technical and Vocational Education and Training (TVET) gets a boost to RM7.9 billion, up from RM7.5 billion this year, to cultivate skilled local talent.
The National Higher Education Fund Corporation (PTPTN) will provide free higher education to 5,800 students from low-income families at public universities next year. Additionally, PTPTN loan repayments will be waived for 6,000 first-class honours graduates from low- and middle-income families, at a cost of RM90 million.
RM6 billion is allocated for education opportunities specifically for Bumiputera students. The National Service Training Programme (PLKN) will be fully revived by 2027, starting with a pilot phase at the higher education level.
Healthcare and Social Welfare
The Health Ministry is allocated RM46.5 billion, with 4,500 contract doctors set to receive permanent positions next year. To promote accessible healthcare, RM60 million from the government and industry players will fund an affordable basic health insurance product for Malaysians. Incentives, including expanded income tax rebates, will encourage citizens to secure insurance coverage.
Cash assistance programmes receive RM15 billion for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) next year, an increase of RM2 billion. Adult Malaysians aged 18 and above will get another RM100 SARA payment in mid-February.
Civil servants of Grade 56 and below, including contract workers, will receive a one-off RM500 aid in early March. All pensioners, including veterans whether pensioned or not, will get a special RM250 aid in the same period, timed ahead of Aidilfitri. Cabinet members’ salaries will continue to be reduced by 20%.
In celebration of Deepavali, STR Phase 4 payments will be expedited, accompanied by a 50% toll discount on October 18 and 19.
Infrastructure and Disaster Preparedness
Transportation upgrades feature prominently, with Prasarana Malaysia Bhd allocating RM1 billion to replace 26 train units on the Kelana Jaya LRT line. RM200 million will enhance stage bus services, including new routes and additional buses in Johor Bahru in preparation for the Johor Bahru–Singapore RTS Link launch.
RM2.3 billion is set aside for airport improvements in Penang, Sarawak, and Sabah. The Malaysian Communications and Multimedia Commission (MCMC) receives RM210 million to develop disaster early warning systems.
Flood mitigation takes priority with RM2.2 billion funding 43 high-priority projects nationwide. In the capital, Kuala Lumpur City Hall (DBKL) will use an internal RM500 million fund to improve hawker facilities and public rental housing (PPR) schemes.
Agriculture, Fisheries, and Entrepreneurship
Farmers will benefit from RM2.62 billion in subsidies and assistance, covering padi cultivation, fertiliser, seeds, and production incentives—the highest allocation to date for food security.
Fishermen retain subsidised diesel at RM1.65 per litre, a living allowance of up to RM300, and catch incentives.
Local entrepreneurs gain access to RM50 billion in loans and financing guarantees, including RM2.5 billion in microfinancing through Bank Simpanan Nasional and Tekun Nasional. Bumiputera entrepreneurs receive targeted support: RM10 billion in government guarantees and RM2.4 billion for G1-G4 Bumiputera contractors.
To attract foreign investment, the multiple-entry travel pass for investors extends from six to 12 months, with the Malaysian Investment Development Authority (Mida) adopting a more proactive approach. A new Asean Business Entity (ABE) status will be introduced for public-listed companies operating in Asean, facilitating talent mobility across member states.
Tourism and Regional Development
Tourism promotion gets RM700 million, including RM500 million for the Visit Malaysia 2026 campaign and RM60 million for marketing and events. Malaysians can claim up to RM1,000 in individual income tax relief for entry fees to local tourist attractions or cultural programmes.
Sabah and Sarawak receive record development allocations: RM6.9 billion for Sabah (up from RM6.7 billion) and RM6 billion for Sarawak (up from RM5.9 billion). Special grants to each state rise to RM600 million, reinforcing equitable growth under the Malaysia Agreement 1963.
Additionally, 50 acres in Bandar Malaysia will be added to Malay reserve land.
Tax Measures and Consumer Protections
Vehicle-related incentives include a 100% exemption on excise duty and sales tax for taxi and private hire owners purchasing new national-brand cars. A matching grant of up to RM4,000 encourages scrapping vehicles over 20 years old in favour of new national models.
Individual income tax relief expands to RM3,000 for fees at registered daily childcare or transit centres for children up to age 12.
Excise duties rise: cigarettes by 2 sen per stick and alcoholic beverages by 10%, effective November 1.
Consumer rights strengthen with the introduction of “lemon law” provisions, potentially under the Consumer Credit Act, to protect buyers from defective vehicles.
Over RM580 million supports national sports, including the ‘Road to Gold’ programme and preparations for the 2027 SEA Games and ASEAN Para Games.
Judges’ salaries will increase by up to 30% from January 1, 2026, marking the first adjustment in a decade.
This budget strikes a balance between fiscal responsibility and people-centric initiatives, channelling resources to uplift communities while fostering sustainable progress for all Malaysians.
