I commend Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim for tabling the 2026 Federal Budget, which continues the path of fiscal discipline and structural reform. In an uncertain global economy, the government has bravely implemented targeted subsidies, saving the nation RM15.5 billion annually, while ensuring fiscal stability and driving national recovery.
The total allocation for the 2026 Budget stands at RM412.1 billion, a reduction of RM8.9 billion from last year. This is the first time in 37 years that the government has tightened spending after prolonged expansion. This demonstrates that the government is committed to fiscal responsibility while maintaining developmental expenditure to spur jobs, investments, and consumption.
Fiscal Discipline Strengthened, Deficit Reduced to 3.5%
Malaysia’s fiscal deficit has declined steadily from 5.5% in 2022 to 3.8% in 2025 and is projected to fall further to 3.5% in 2026. This reflects the government’s firm determination to control debt, optimize expenditure, and improve revenue management.
Under the Fiscal Responsibility Act (FRA) and the reformed Government Procurement Act, the Anwar administration has enhanced transparency and accountability, curbing waste and corruption, and ensuring that resources truly benefit the people. Over the past two years, anti-corruption and enforcement agencies have recovered RM15.5 billion in misappropriated public funds, while more than RM700 million has been invested to strengthen enforcement and monitoring systems, a sign that Malaysia is on a new path of integrity and accountability.
Targeted Subsidies Promote Social Fairness
The 2026 Budget continues the implementation of targeted subsidies and resource restructuring to prevent benefits from flowing to foreigners and high-income groups, ensuring that assistance reaches the low and middle income Malaysians who truly need it.
Through the restructuring of fuel, egg, poultry, and diesel subsidies, the government saves about RM15.5 billion each year. These savings are redirected into the “Madani Program” and “People’s Assistance Projects” that directly benefit rural communities, fishermen, smallholders, and e-hailing drivers.
This is a structural reform essential for Malaysia’s long term sustainable growth not a short term populist policy.
Advancing High Value Investment and Semiconductor Growth
The Budget, through the National Industrial Master Plan (NIMP) and the National Semiconductor Strategy (NSS), positions Malaysia as a regional leader in advanced technology. The government has allocated over RM500 million to support the semiconductor, artificial intelligence (AI), and green technology sectors, including the launch of the “SemiconStart” incubation program to help local startups integrate into global supply chains.
This reflects the government’s understanding that technology is the core engine of future economic growth. The synergy between semiconductors, AI, energy transition, and the digital economy will propel Malaysia toward high income status.
Raising Incomes and Living Standards
The 2026 Budget maintains a people centered approach that prioritizes fair distribution alongside economic growth. The government will continue to review and gradually raise the minimum wage while expanding the “Madani Mobile Service Teams” and “Madani Village Program” to reduce the urban rural divide.
Record RM90 Million Allocation for Chinese New Villages and Indian Villages
I particularly welcome the record-breaking RM90 million allocation for Chinese New Villages and Indian Villages nationwide, aimed at upgrading infrastructure, roads, and community facilities. This reflects the unity government’s fair and inclusive governance, upholding the Malaysia Madani vision.
Additionally, RM95 million has been allocated for the repair and upgrading of public toilets and parks across all local authorities, improving hygiene, community spaces, and overall quality of life.
Artificial Intelligence and Innovation to Shape the Future
I also commend the government’s decision to designate AI as a national priority. The establishment of the National Artificial Intelligence Office (NAIO) and the country’s first AI Academy, alongside a RM2 billion investment in a sovereign AI cloud system, marks a major leap forward.
The widespread adoption of AI will transform the landscape of employment and education. Malaysia must position itself as a creator not a user of AI technology.
Continuing Reform and Revitalizing the Economy
The 2026 Federal Budget represents a vital step by the unity government to sustain reform and fortify Malaysia’s economic foundation. It strikes a balance between fiscal discipline and growth.
From fiscal consolidation and targeted subsidies to technological innovation and people’s welfare, this budget showcases both progress and vision. As long as we stay true to reform and integrity, Malaysia will embark on a new era of economic resurgence.