PETALING JAYA, July 28 — Malaysia’s public health care budget cannot be increased by another RM36 billion, or an additional 2 per cent of the country’s gross domestic product (GDP), because of excessive government debt, said Dzulkefly Ahmad.
The health minister was responding to a question from the audience at a Covid-19 book launch yesterday about increasing the Ministry of Health’s (MOH) budget from 3 per cent to 5 per cent of GDP, instead of privatising the public health care system through Rakan KKM.
“You know very well that the fiscal space is very much constrained because of our debt to GDP. Our revenue to GDP is not improving; if at all it’s just plateauing, if not dwindling. This means we just can’t go back to what is appropriate for an upper middle income economy [for public health care] to be given 5 to 6 per cent of GDP,” said Dzulkefly during a Q&A session broadcast live at the launch of the book titled Crisis and Community: Covid-19 in Malaysia, edited by political analyst Bridget Welsh, at Gerakbudaya.
“Do you understand what it means in terms of dollars and cents of 1 per cent of GDP? What is our GDP right now? It’s RM1.8 trillion. What is 1 per cent? RM18 billion. Two per cent increase over and above what we get right now? It’s RM36 billion!” added the visibly agitated health minister.
“Do I expect the minister of finance, MK2 or MK1, to be able to dispense that to me, when you know very well there’s this thing called opportunity cost in economics? What you give to A, you can’t give to B, C, and D. So we’re always struggling to manage the various demands that are not mutually exclusive.
“It’s always easy to ask for 2, 3 per cent more, ‘let’s get to 5, 6 per cent of GDP’…But what would RM36 billion be to a government that is now strapped with debt-to-GDP that’s gone towards our statutory limit of 65 per cent of GDP? I want you to be responsible.”
In a May report cited by The Star, Kenanga Research calculated that government debt in the first quarter of 2025 expanded to 65.5 per cent of GDP, higher than the government’s calculation of 62.6 per cent. For this year, the research house projected that government debt would rise to RM1.33 trillion, or 65.9 per cent of GDP.
Kenanga Research’s May report predated the July 23 special announcement by Prime Minister Anwar Ibrahim, who is also finance minister, on reducing the price of RON95 petrol by six sen to RM1.99 from RM2.05 per litre, besides RM100 credit for all Malaysian adults to purchase basic goods at selected stores until the end of the year.
The Ministry of Finance (MOF) previously forecast 64 per cent debt-to-GDP ratio for 2025.
MOH received RM45.3 billion for Budget 2025, a 9.8 per cent increment from the RM41.2 billion allocated last year. An extra RM36 billion allocation, as cited by Dzulkefly, is equivalent to a 79 per cent increase of MOH’s 2025 budget, totalling RM81.3 billion.
According to a December 2024 report by MOH’s Malaysia National Health Accounts, Malaysia’s total expenditure on health reached 4.6 per cent of GDP in 2023, comprising 2.4 per cent public and 2.2 per cent private sources of financing.
Raising public health expenditure by another 2.6 per cent of Malaysia’s 2023 RM1.8 trillion GDP to reach 5 per cent would amount to an additional RM46.8 billion allocation, higher than the RM36 billion (2.0 per cent of GDP) quoted by Dzulkefly. An additional RM46.8 billion is equivalent to a 103 per cent increase of MOH’s RM45.3 billion 2025 budget.
Then-Health Minister Khairy Jamaluddin declared at the 2022 Health Policy Summit that the MOH was seeking to increase public health expenditure to 5 per cent of GDP, the benchmark for an upper middle income economy.
”I know all ministries are also seeking allocations from the prime minister and all ministries are equally important, but some ministries are more important than other ministries,” Khairy was quoted as saying at the August 2022 conference in front of then-Prime Minister Ismail Sabri Yaakob.
“As George Orwell said in his book, ‘all animals are equal, but some animals are more equal than others’,” the health minister added, quoting from Orwell’s Animal Farm. “And in the same spirit, the Ministry [MOH] is created more equal than others as our core business is on the life and death of the people.”
In contrast, Dzulkefly told yesterday’s book launch on the Covid-19 pandemic that he initiated the “gamechanger” Rakan KKM because “I can’t be asking for more money from the minister of finance or PMX.”
Rakan KKM: Reform Of ‘Zero-Sum Game’ FPP Service
Dzulkefly sought to reframe Rakan KKM as a “reform” of the MOH’s existing full-paying patient (FPP) service, rather than “something truly new.”
He said private wings in public hospitals were a “zero-sum game” because FPP uses taxpayers’ monies, unlike Rakan KKM that will use investments from government-linked investment companies (GLICs) like the Employees’ Provident Fund (EPF).
“The purpose of doing this is to first retain my specialists, to reduce the attrition rate, and to get more revenue so that I can invest in my public facilities, cross-subsidise, raising the floor and raising the ceiling as well. That’s our Madani cliché.”
He added that Rakan KKM will benchmark prices for private health care.
“I’m willing to leverage and unlock whatever potential, whatever value, excess capacity in our hospitals. Mind you, directors of hospitals are queuing up to say, ‘we want to go’,” said Dzulkefly, adding that 90 per cent of specialist doctors at a town hall said they would seriously consider joining Rakan KKM.
The health minister reiterated earlier comments that Rakan KKM would not provide emergency services, but only elective procedures.
“It gives the impression when you have money, you jump the queue. But I remind you again this is not for emergency cases, only for electives.”
Dzulkefly said while one typically has to wait six months for an elective surgery in a government hospital, “perhaps there’s a choice” in Rakan KKM.
He stressed that he took up the health minister position for the second time to implement the reforms that he was already working on in the first Pakatan Harapan government.
“I came back with a vengeance to get reforms done, particularly on health financing reform. And I don’t intend to fail.”
Dzukefly wrote the foreword for Welsh’s Crisis and Community: Covid-19 in Malaysia, which was published by Gerakbudaya, that features a compilation of essays by various writers, including paediatricians Dr Amar-Singh HSS, Dr Musa Mohd Nordin, and Dr Tan Hui Siu, as well as CodeBlue editor-in-chief Boo Su-Lyn.
Correction note: Errors in the stand-first and the sixth paragraph were corrected. In the sixth paragraph, the word “beyond” was corrected to “towards”. Health Minister Dzulkefly Ahmad said government debt to GDP has gone “towards”, not “beyond”, the statutory limit of 65 per cent of GDP as initially reported.
