Budget Cuts!

News of the Treasury ordering ministries and agencies to cut their operating expenditures is not unexpected due to the ensuing global energy crisis. A review of operating expenditures is needed as the subsidy bill is expected to balloon from RM15 billion allocated for 2026 to RM58.4billion (total allocation for subsidies, assistance and incentives for 2026 was RM54.7billion). And I take the RM15billion at face value.

The cuts include salaries and allowances for unfilled vacancies, a 10% reduction on services, supplies and assets, as well as a 20% cut on budgets for federal statutory bodies and companies limited by guarantees.

A total of RM10billion could be saved, including RM3.06billion from the health ministry and RM2.39billion from the higher education ministry. It is a 6.6% cut for MOH’s RM46.5billion budgets for 2026, leaving it less than its RM45.3billion 2025 budget. The Ministry of Higher Education (MOHE) will take a 12.8% cut.

Malaysia spends about 5% of its GDP on health, which is considered low compared to other upper-middle-income countries.

My lecturers used to tell me; people/employees are the most vital asset and the backbone of any successful organisation. They are the primary drivers of productivity, innovation and customer satisfaction – providing essential skills and intellectual capital that fuel business growth. They must be appreciated for their contributions as they can make or break business success.

Anwar Ibrahim has outlined a vision for Malaysia to become a “world-class” nation but how are we to achieve it if we do not take good care of the education and health of our people/employees?

We have issues such as chronic underfunding, low morale, rapidly aging population, overcrowding, rising non-communicable diseases, rural-urban disparities and a critical shortage of medical staff due to stagnant reform.

There are reports of medical officers who have yet to receive the new on-call allowance (Etap) rates that came into effect last November. Staff at MOH, particularly those in Klinik Kesihatan, previously said they frequently fork out their own money to meet facility needs due to limited budgets.

The cut would undermine the public healthcare system. More than 70% of Malaysians relied on the public healthcare system and the MOH’s attrition rate is an average of 10 staff per month.

The minister expects a cut of about 10% (much higher than the amount suggested by the Treasury) but maintains that “essential core services” will be protected.

I think the rakyat fully support this initiative of cutting “non-essential” expenditure and will be more appreciative it is moved to the “essential core services”, given the above inherent issues.

The Treasury should be mindful of this “realignment” in future budget allocations for all ministries and agencies.

Nevertheless, I wish to make a few suggestions to avoid cutting costs for core ministries as follows:

1. Defer the Penang Mutiara Line since there has been no land acquisition yet – an instant saving of RM16.8billion.
2. Review and reduce PM’s Department budget (Projek-projek Kecil, Projek Khas, Projek Mesra Rakyat, Pengurusan Aset dan Bangunan, PPP/PFI, Suruhanjaya Pilihan Raya (spending more than RM500million in 2 years) and collapsing non-performing GLCs/GLICs).
3. Review, “Pencen dan Pencen Terbitan – Anggota Pentadbiran dan Ahli Parlimen”, increased from RM85million in 2025 to RM110.4milllion in 2026, and “Pencen dan Pencen Terbitan – Sabah dan Sarawak”, increasing from RM0.96billion in 2025 to RM2.4billion in 2026.
4. Collapse MyHSR Corporation Sdn Bhd. It remains in planning and evaluation phase with no firm decision or RFP launch nearly two years post-Request for Information and a paper presented to Cabinet in early 2025. Not forgetting, compensation paid to Singapore of over RM320million for abortive costs and no publicly disclosed comprehensive, up-to-date figures on total expenditures.
5. On a smaller-scale, KPKT can defer or stop the RM40million Taman Persekutuan Bukit Kiara project in KL which duplicate facilities and have caused mud floods in the area while countless basic amenities within the park itself, remain in disrepair.

Public healthcare system is one of the country’s most important social protections and should be viewed as a core public investment. It protects lives, productivity and economic stability. A country cannot build resilience by weakening its public healthcare system and the ministry should not be treated as a convenient place to find savings.

As for MOHE, issues on skills mismatch with low graduate employability, poor command of English among graduates and a lack of critical thinking skills is common knowledge. I will not dwell into it and there was also some integrity crisis at one of the public universities.

The Madani government should rebuild trust via transparent and inclusive governance to become a “world-class” nation.

Let us care about care

What say you…

 

Saleh Mohammed