THE government's move to rationalise subsidies under Budget 2026 is expected to save RM15.5 billion annually, a shift that experts say reflects a firm commitment to strengthening national fiscal discipline while ensuring more targeted support for Malaysians across all income groups.
The measure, unveiled by Prime Minister and Finance Minister Anwar Ibrahim during the tabling of “Belanjawan MADANI Keempat: Belanjawan Rakyat (Fourth MADANI Budget: A Budget for the People)” in the Dewan Rakyat on Friday, forms part of the broader 13th Malaysia Plan (RMK13) aimed at long-term economic empowerment and structural reform.
Director of the MBA Programme at Putra Business School, Universiti Putra Malaysia, Ahmed Razman Abd Latiff, said the targeted subsidy strategy would channel national resources more effectively and equitably.
“This approach is expected to generate savings for the government, ensuring that every ringgit of revenue is directed back to the people,” he said. “Previously, national income increases were often undermined by leakages, wastage, and corruption.”
Ahmed Razman noted that targeted subsidies would reduce the burden on public finances without the need to introduce new taxes or raise existing ones.
“This is good for the rakyat, as they are not burdened with additional taxes and can benefit directly from savings generated through rationalisation,” he added.
Anwar told Parliament that the RM15.5 billion in annual savings would allow the government to increase allocations for public welfare, cost of living support, and quality infrastructure investments.
Meanwhile, President and Group Chief Executive Officer of Agrobank, Tengku Ahmad Badli Shah Raja Hussin, welcomed the allocation of RM1.1 billion to the bank under Budget 2026.
The funding is intended to assist entrepreneurs in expanding their operations, while also advancing automation and mechanisation within the agro-industrial sector.
“This sizeable financing is not merely to empower industry players, but also to enhance productivity and fortify the agricultural sector as a cornerstone of national food security,” he said.
Tengku Ahmad Badli Shah emphasised that Agrobank remains committed to working closely with the government to uplift this critical sector.
“Our mission is more than just providing financing,” he said. “We are dedicated to supporting livelihoods and building a sustainable future.
Budget 2026 is not just about numbers, it represents hope and opportunity for farming communities across the agri-food sector.” - October 12, 2025
