BUDGET 2026 | Prime Minister Anwar Ibrahim today tabled a slightly smaller RM419.2 billion Budget 2026, which included initiatives to ease living costs and strengthen the public sector.
Civil servants in Grade 56 and below will receive a RM500 special aid, while all government retirees will get RM250. Judges will see salary increases of up to 30 percent - their first in a decade.
Healthcare and education remain top priorities, with RM46.5 billion and RM66.2 billion allocated for the Health Ministry and Education Ministry, respectively, alongside expanded aid for students, teachers, and health workers.
The budget also includes tax reliefs for homebuyers, childcare, and domestic tourism, with an expected annual savings of RM15.5 billion from subsidy rationalisation.
6pm - PM ends budget speech with Palestine tribute
Prime Minister Anwar Ibrahim ends his budget speech by voicing solidarity with Palestinians and hails the role of the US, Egypt, and Qatar in negotiating for peace between Hamas and Israel.
5.58pm - Judges get up to 30pct raise, RM500 aid for civil servants
The government agrees to raise the salaries of judges by up to 30 percent, effective Jan 1 next year. The last salary adjustment was in 2015, and judges do not receive annual increments like other schemes.
Prime Minister Anwar Ibrahim says the judiciary, once seen as having been tarnished, has now regained its stature with greater integrity, credibility, and independence.
Anwar, who is also the finance minister, also announces a special financial assistance of RM500 for all civil servants in Grade 56 and below, including contract appointments.
“The special financial assistance will also be extended to all government retirees, including both pensioned and non-pensioned veterans, amounting to RM250. This assistance will be disbursed in early March 2026 in conjunction with the Aidilfitri celebration,” he adds.
5.57pm - Ensuring BM taught in international schools
Prime Minister Anwar Ibrahim says international schools have been lax with teaching Bahasa Malaysia.
He says the government will carry out serious monitoring to ensure that Malaysian students at international schools, in particular, will be taught the national language.
5.55pm - Building unity centres, nationalist film incentives
RM55 million will be allocated for unity and national identity programmes, such as a unity week.
RM46 million is also being allocated to build three new “unity” activity centres in Terengganu, Perak, and Sarawak.
Meanwhile, the government is also allocating RM110 million as incentives for local and international filmmakers to make films in Malaysia.
This includes RM10 million specifically earmarked for “nationalist” films.
5.51pm - Stamp duty exemption for first-time homebuyers
Prime Minister Anwar Ibrahim says the government proposes to extend the full stamp duty exemption on transfer and loan agreements for the purchase of a first home for another two years, until Dec 21, 2027.
This involves first-time homebuyers purchasing their first home priced up to RM500,000.
5.44pm - Education Ministry allocation increases to RM66.2b
Next year, the Education Ministry will receive RM66.2 billion, compared to RM64.2 billion this year.
Prime Minister Anwar Ibrahim says RM2 billion has been allocated to upgrade more than 520 dilapidated schools, particularly in Sabah and Sarawak, in addition to repairing and maintaining all types of schools.
He announces that a total of 38 new schools will be built to meet the needs of local communities. In addition, the Ladang Jeram Tamil school in Pahang and the Aik Hua Chinese school in Perak will also be reconstructed.
5.42pm - PTPTN: Free education for poor, debts forgiven, blacklist
Students from poor families earning less than RM2,700 per month will be entitled to free tertiary education funded by PTPTN.
Meanwhile, PTPTN borrowers from low and middle-income families who graduate with first-class honours in a degree programme will also have their debts forgiven.
As for defaulters who are working and can actually afford repayments, the government will reimpose an international travel blacklist.
5.40pm - Disabled students to get RM150 monthly allowance
All disabled school students will get a RM150 per month allowance.
General school aid for poor students is also expanded to cover students up to Form 5.
5.39pm - RM4k grant to exchange old car for new national car
If your car is at least 20 years old, the government and national carmakers will provide a RM4,000 matching grant for you to junk the car and buy a new national car.
5.37pm - Tax relief, exemption to encourage insurance coverage
To encourage insurance or takaful protection among the people, Prime Minister Anwar Ibrahim says the government proposes the following:
Individual income tax relief of up to RM3,000 currently given for life insurance premiums or life takaful contributions for oneself and spouse will be extended to include children.
Full stamp duty exemption on small-value insurance policies or takaful certificates purchased by individuals and MSMEs will be extended for three years until 2028.
Full stamp duty exemption on insurance policies and takaful certificates under the Perlindungan Tenang product will also be extended for three years until 2028.
Anwar says that to encourage private hospitals to assist underprivileged patients in obtaining healthcare services, private hospitals will be allowed to establish Hospital Welfare Funds.
“Income received by these funds will be exempted from tax, and contributors to the funds will also be eligible for tax deductions,” he adds.
5.35pm - Booze and cigarettes to cost more
Starting Nov 1 this year, the excise duties on alcohol will go up 10 percent.
Meanwhile, cigarettes will cost two sen more per stick.
Cigars, cheroots, and cigarillos will go up by RM40 per kg, while heated tobacco products will cost RM20 more per kg of tobacco.
Prime Minister Anwar Ibrahim says the hikes will help fund health initiatives such as treatment for diabetes and heart disease.
5.32pm - 40pct more on-call allowance for govt health workers
On-call allowances for public health workers will go up by around 40 percent, effective Oct 1.
Prime Minister Anwar Ibrahim gives an example of how a specialist taking a call on a day off will receive RM350 instead of RM250.
5.30pm - Allocation for Health Ministry increases to RM46.5b
Prime Minister Anwar Ibrahim announces that RM46.5 billion will be allocated to the Health Ministry, an increase from RM45.3 billion.
He stresses the government remains committed to addressing six key challenges in the health sector, including improving the quality of public healthcare infrastructure.
“All government hospitals and clinics will undergo maintenance and refurbishment works involving an allocation of RM1.2 billion. District hospital wards nationwide will also be upgraded (RM100 million).
“In addition, outdated medical equipment will be replaced, while advanced tools for new medical disciplines will be procured (RM755 million),” he adds.
5.25pm - EPF matching contribution for gig, e-hailing workers
The EPF matching contribution scheme for voluntary contributions by gig workers and e-hailing workers is increased to RM600 per year or RM6,000 in a lifetime.
The rate for informal workers is maintained at RM500 per year and RM5,000 in a lifetime.
5.21pm - Another round of RM100 Sara aid
Rahmah Cash Aid (STR) and Rahmah Necessities Aid (Sara) will be slightly recalibrated this year, with more aid being channelled through Sara.
Most Rahmah Cash Aid recipients will receive RM100 in Sara per month, while households registered under eKasih will receive an additional RM100 per month.
The total maximum payout will be the same at RM4,600 for households earning less than RM2,500 with five children or more that are registered with e-Kasih.
However, instead of RM2,500 being channelled through STR, this amount is lowered to RM2,200, while the total Sara aid will be RM2,400.
Meanwhile, Prime Minister Anwar Ibrahim announces that the government will give another round of RM100 Sara aid to all adult Malaysians next year.
This will be channelled in the middle of February, with the premier calling it as aid for the Chinese New Year and Ramadan.
5.18pm - Anwar cites Thirukkural, announces early STR for Deepavali
Prime Minister Anwar Ibrahim announces that, in conjunction with the Deepavali celebration, the STR Phase 4 payment originally scheduled for November and worth RM2 billion, will be brought forward and distributed starting Oct 18.
He adds that the government has also approved a 50 percent toll discount for two days in conjunction with the Deepavali festive period.
Citing a verse from the classic Tamil text Thirukkural, the premier says, “Joy and hardship may come and go, but steadfastness of the heart remains the highest mark of human virtue”.
5.15pm - RM3k tax relief for daycare to be expanded
The RM3,000 tax relief for daycare will be expanded to children in a wider age range.
Currently, it covers fees for children sent to registered daycare and pre-schools up to the age of six.
Under Budget 2026, it will cover registered daycare and transit centres for children up to 12 years old.
5.08pm - RM80m for 2.5k rangers to protect forests, animals
The government will allocate RM80 million for 2,500 community rangers to protect the country’s forests and endangered animals.
The rangers will include 1,000 Orang Asli and 700 armed forces veterans.
5.03pm - Defence allocation: PM cites ancient Chinese proverb
Prime Minister Anwar Ibrahim cites an ancient Chinese proverb both in Mandarin and Bahasa Malaysia on the importance of preparedness.
“This profound philosophy reminds us that the wisdom of governance lies in preparedness, not complacency; and that stability endures only when accompanied by an awareness of how fragile a nation’s fate can become through negligence and indifference,” he adds.
Anwar, who is also the finance minister, said the Defence Ministry has been allocated RM21.7 billion, while the Home Ministry received RM21.2 billion.
As for new procurements, the prime minister said it would include Medium, Short, and Very Short Range Air Defence systems, two Multi-Role Support Ships, and 10 Malbatt vehicles.
4.57pm - Rebate programme for energy-efficient appliances
The government will allocate RM20 million for a rebate programme on energy-efficient appliances.
This is likely for a continuation of the Save programme.
Meanwhile, the tax relief for purchasing composting machines will be moved from the electric vehicle charging equipment category to the lifestyle category.
4.52pm - MCMC to build RM2b ‘sovereign AI cloud’
The MCMC will develop a “sovereign AI cloud” to the tune of RM2 billion.
This is part of the government’s “AI Nation 2030” agenda.
For small and medium industries, it will give an additional 50 percent tax cut for AI and cybersecurity training approved by the National AI Council for Industry.
4.50pm - Tax relief to encourage domestic tourism
To encourage domestic tourism in conjunction with Visit Malaysia Year 2026, Prime Minister Anwar Ibrahim says a special individual income tax relief of up to RM1,000 will be provided for expenses on entrance fees to local tourist attractions and cultural programmes.
4.43pm - TVET bill in the pipeline, allocation increasing to RM7.9b
Prime Minister Anwar Ibrahim says more local talent in the field of Technical and Vocational Education and Training (TVET) is needed to meet the demands of high-growth industries.
“Accordingly, the National TVET Council will further strengthen the TVET ecosystem in a more comprehensive manner, including a proposal to draft a TVET Bill,” he adds.
Anwar, who is also the finance minister, reveals that allocation for TVET will increase to RM7.9 billion, compared to RM7.5 billion previously.
“TVET education and training opportunities will be enhanced, particularly to support high-priority sectors,” he adds.
4.36pm - RM10m for surveying rare earth nationwide
The government will allocate RM10 million to map out rare earth in the country.
The premier says the focus will be on developing downstream industries, including through international partnerships spearheaded by Khazanah.
4.29pm - Tax deductions for donations to anti-graft programmes
Prime Minister Anwar Ibrahim reveals that the government plans for anti-corruption programmes organised by civil society organisations recognised by MACC to be approved for tax deductions as national interest projects.
“Donors who make cash contributions to approved anti-corruption programmes will also be eligible for income tax deductions,” he adds.
4.27pm - Subsidy cuts to result in RM15.5b savings
All the subsidy cuts carried out by the government will lead to RM15.5 billion in savings annually.
Prime Minister Anwar Ibrahim says the Budi95 exercise will save RM2.5 billion, while diesel subsidy rationalisation will save RM5 billion.
Electricity subsidy rationalisation, meanwhile, will save the government RM6 billion each year.
4:25pm - Tax exemption limit for Langkawi, Labuan vehicles
Prime Minister Anwar Ibrahim says there are luxury vehicle owners who have long been taking advantage of the vehicle tax exemption in Langkawi and Labuan.
“To address this leakage, the government plans to limit the vehicle tax exemption in Langkawi and Labuan to vehicles valued at no more than RM300,000, effective Jan 1, 2026,” he adds.
4.22pm - Lemon law
The government will introduce a lemon law, says Prime Minister Anwar Ibrahim.
A lemon law gives consumers protection if they buy defective products, such as cars.
4:20pm - RM15.5b stolen funds recovered
Prime Minister Anwar Ibrahim says that under the Madani administration, enforcement bodies such as the MACC, police, Domestic Trade and Cost of Living Ministry, Customs Department, and the Malaysia Competition Commission have successfully recovered and collected penalties amounting to nearly RM15.5 billion.
“Most recently, the police succeeded in dismantling a syndicate operating in Penang and Port Klang.
“This is what we mean when we emphasise good governance in administration. Imagine - in just two years, RM15.5 billion of embezzled and stolen funds have been recovered,” he adds.
4.00pm - Smaller budget
Budget 2026 is RM419.2 billion.
It is slightly smaller than the one announced last year, as the Anwar Ibrahim administration reins in its spending and faces pressure from global oil prices.
It is also the first contraction since Budget 2020.
However, Prime Minister Anwar Ibrahim, in his budget speech, says that spending by government-linked investment companies and statutory bodies, as well as public-private investments, will give the government an additional RM50.8 billion for public initiatives.
Anwar says this will push the budget to RM470 billion.
- Mkini
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