MALAYSIA’S Budget 2026 will see RM470 billion in total expenditure, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced today, underscoring his administration’s commitment to fiscal reform, moral governance and long-term national renewal under the MADANI economic framework.
Delivering the Fourth MADANI Budget in Parliament, themed "Belanjawan Rakyat", Anwar positioned it not merely as a fiscal document, but as a defining chapter of national maturity.
"A budget is not just a presentation of numbers or fiscal health. It is a moral statement, a historic pledge, and a sincere covenant between the government and the people," he said.
The 2026 budget marks the opening year of the 13th Malaysia Plan (RMK13) and projects GDP growth between 4.0 and 4.5 per cent, slightly below this year’s estimated range of 4.0 to 4.8 per cent, amid ongoing global economic uncertainty, geopolitical tensions and disruptive tariff wars.
Anwar maintained that Malaysia’s economy remained resilient, citing a 4.4 per cent growth recorded in the first half of 2025.
"We have chosen a path that is difficult, winding and long — the path of reform, fiscal discipline, and institutional strengthening — because only this path will save the nation in the long term," Anwar declared.
The total expenditure for 2026 includes RM338.2 billion in federal operating costs and RM81 billion for development. An additional RM30 billion will come from investments by government-linked investment companies (GLICs), RM10 billion through public-private initiatives, and RM10.8 billion from statutory bodies and government-linked firms.
Federal revenue collection is expected to rise to RM343.1 billion next year, up from RM334.1 billion in 2025.
The Prime Minister reaffirmed a key MADANI goal: reducing the fiscal deficit from 5.5 per cent in 2022 to 3.5 per cent by 2026, with a medium-term ambition of reaching 3.0 per cent. He added that new borrowings had already declined significantly — from RM100 billion in 2022 to RM77 billion in both 2024 and 2025.
Instead of raising taxes, Anwar emphasised improving governance, enhancing enforcement and closing loopholes long exploited by elites and syndicates.
"We have dismantled smuggling networks, broken cartels and recovered stolen funds — all without increasing the rakyat’s burden," he said.
He cited enforcement-led recoveries amounting to RM15.5 billion over two years, driven by agencies including the Malaysian Anti-Corruption Commission (MACC), Royal Malaysian Police (PDRM), Customs, the Domestic Trade Ministry and the Malaysia Competition Commission (MyCC).
To further empower enforcement, more than RM700 million will be allocated for training and asset acquisition for key agencies.
Among new measures, a digital tax stamp system will be introduced to curb counterfeiting and border leakages. The government will also fully implement electronic invoicing and self-assessment for stamp duties in 2026, while expediting refunds for overpaid taxes.
To address misuse of duty exemptions, the government will cap vehicle tax relief in Langkawi and Labuan at RM300,000, effective 1 January 2026.
In a move tying tax incentives to civic duty, Anwar proposed that recognised anti-corruption programmes organised by civil society organisations be granted tax-deductible status.
"Why target subsidies?" he asked. "Because blanket subsidies leak — they benefit foreigners and large companies. Subsidies should be the right and privilege of Malaysians."
He pointed to savings from diesel subsidy rationalisation, which have helped fund initiatives like SARA Untuk Semua, aimed at easing household costs.
"This is the MADANI economy. Its purpose is to ensure we can provide for the rakyat, create jobs, generate income and ease the cost of living."
Framing the budget as both reformist and restorative, Anwar concluded: "After daring to implement reform, it is now time to return the gains to the people."
Quoting Enlightenment thinker Montesquieu, he warned, "Power without accountability is the beginning of tyranny," reaffirming his government’s intent to restore dignity and trust in national governance.
Budget 2026, Anwar declared, is not a populist gesture nor an austerity budget. It is a roadmap for moral leadership, sound governance and a maturing democracy.
It was earlier reported that, clad in a light blue baju Melayu, Anwar was seen carrying the text of the 2026 Budget using a special bag made by a less-abled designer (OKU).
Asked whether there was good news for the M40 income group, the Prime Minister only showed a ‘good’ hand signal.
He was seen leaving the Ministry of Finance (MOF) at 3.30 pm.
The presentation of the MADANI 2026 Budget is the fourth budget under his administration.
The special bag was designed by Anthony Liew You Chung, 37, an OKU youth from Kuching, Sarawak who is active with Heart Treasures, a social enterprise that provides training, therapy and employment to young people with special needs.
Anthony, who suffers from autism and hearing problems, wove the bag panels using used nitrile gloves. - October 10, 2025
