THE MADANI Government has announced its largest national budget to date, with a record allocation of RM470 billion under the 2026 Federal Budget, reflecting a strong commitment to economic reform and people-centred development.
Unveiled by Prime Minister Datuk Seri Anwar Ibrahim—who also serves as Minister of Finance—the budget is themed “Belanjawan Madani Keempat: Belanjawan Rakyat”, and marks the inaugural budget aligned with the 13th Malaysia Plan (RMK13).
The budget consists of RM338.2 billion in federal operating expenditure, RM81 billion for development, and RM30 billion in investments through government-linked investment companies.
“This budget stands as proof that the government has chosen the path of national rejuvenation and comprehensive reform,” said Anwar, outlining nine key resolutions guided by three pillars of the Madani Economy.
The 2026 Budget introduces 13 new initiatives to support citizens across income groups, sectors, and regions, with emphasis on welfare, education, job security, cost of living, and institutional transparency.
Direct cash aid schemes such as STR and SARA will be continued and expanded to reach more eligible households.
Higher education sees a breakthrough as PTPTN loans for 5,800 eligible B40 students at public universities will be fully written off.
In the health sector, a portion of the tax revenue from tobacco and alcohol will be channelled into treating critical illnesses such as lung disease, diabetes, and cardiovascular conditions.
The government, alongside industry players, will also contribute RM60 million to introduce affordable basic insurance products and implement a Diagnosis Related Group (DRG) healthcare model.
Support for contract medical professionals continues, with 4,500 doctors expected to be appointed to permanent positions in 2026, alongside a 40 per cent increase in the On-Call Duty Allowance (ETAP).
The government will inject RM1 billion into community-based initiatives, including “Sekolah Angkat” and “Kampung Angkat”, to stimulate local economic activity. Under the new Dana Sejati Madani programme, each village may receive up to RM100,000 to drive community-led economic projects.
Tourism is being targeted as a growth sector, with a RM700 million allocation aimed at attracting 47 million visitors.
For the agriculture and fisheries sectors, existing subsidies and incentives for farmers and fishermen will be enhanced to ensure more sustainable incomes.
The government is also introducing improved social protection for gig workers through strengthened EPF and PERKESO contributions.
Housing affordability remains a key focus, with 80,000 first-time homebuyers eligible for mortgage guarantees under the expanded SJKP scheme, now valued up to RM20 billion.
In education, nearly RM2 billion will be spent upgrading over 520 dilapidated schools—especially in Sabah and Sarawak—and constructing 38 new schools.
Additionally, 150,000 students with disabilities will receive a monthly allowance of RM150, and RM870 million has been allocated to the School Feeding Programme, benefitting 870,000 pupils.
Civil servants will receive a special RM500 payment, while judges’ salaries will see increases of up to 30 per cent. The living allowance for 4,000 KEMAS contract retirees will rise from RM300 to RM500 monthly.
A strong Islamic social agenda is also present. The EPF withdrawal limit for performing Hajj has been raised from RM3,000 to RM10,000.
Government servants can also tap into early redemption of their GCR savings—up to RM10,000—for the pilgrimage. A special RM500 one-off contribution will be given to contract-based KAFA teachers, imams, bilals, and other mosque staff.
With a clear tilt toward social equity and structural reform, Budget 2026 is positioned not only as a fiscal instrument but as a declaration of intent for a more inclusive and resilient Malaysia. - October11, 2025
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