Budget 2026: Anaemic Raise In MOH’s Allocation Belies Public Health Care Crisis was the article put out by the Galen Centre for Health and Social Policy after Budget 2026 was presented last week.
According to the Galen Centre, the “anaemic” 2.8 per cent (RM1.3 billion) increase in the Ministry of Health’s (MOH) allocation in Budget 2026 to RM46.5 billion belies the fact that the public care system is over-congested, understaffed, and underfunded.
If one looks at the top-line numbers, what the Galen Centre said is true. But if one digs deeper and understands the way that MOH is structured, staffed, and funded, then one will have a better understanding of the MOH allocation.
In Budget 2026, spending on emoluments is budgeted at RM109.4 billion in 2026. This translates into a 5.6 per cent increase from 2025.
This is because of the second phase of the Public Service Remuneration System (SPPA), which includes a 7 per cent salary increase set to take effect in January 2026. This follows the first phase of SPPA, with an 8 per cent hike effective from December 2024. This will result in the projected emoluments bill to 32.3 per cent of the government’s total operating budget (opex) for 2026.
For MOH, the 2026 opex saw an increase of RM1.241 billion. The total emoluments are budgeted at RM24.8 billion or 3.0 per cent (RM723.1 million) more than in 2025.
This amount is 62.5 per cent of the total opex budget for MOH in 2026. But if we include payments for contract personnel, it will jump to 68.6 per cent.
As part of the total emoluments, there is an allocation of RM1.187 billion for SPPA implementation in 2026 (which should include the RM150 million for the increase in on-call allowances). There is a reduction of about RM500 million in the management programme (not clear why) and funding for other special programmes such as the operation of new facilities, the Madani Medical Scheme, the Malaysia Healthcare Travel Council (MHTC), and others, to cater for the increases in the emoluments.
One of the main reasons why the emoluments component for MOH remains elevated and takes up a disproportionate slice of the total opex budget is because MOH is a very labour-intensive department, with services operating 24 hours a day, 365 days a year.
Public health workers are the considered the most highly paid in the public service, with the most senior positions in the civil service. They are paid some type of allowances such as critical allowance, on-call (overtime) allowance, specialist allowance, trainee specialist allowance, locum, and others.
The reason for the high number of senior positions in MOH is because it has time-based promotions for doctors, dentists, and pharmacists. These three categories of personnel added up to 72,366 in 2023, which is nearly one-third of the total number of health care workers.
It takes about 12 years to be promoted to Grade UD54, while specialists take eight years. It takes another five years to reach Grade UD56 and JUSA/Khas Grades, subject to availability of posts.
According to the latest data, the number of doctors has increased by 10.4 per cent from 2019 to 2023 to 53,512, and registered nurses increased by 6.7 per cent to 70,240 during the same period.
In has been reported that as of June 2024, there are 266,133 permanent health care workers, with another 32,720 on contract. Of these, 44,155 are medical officers, while 7,638 are specialist doctors, making for a total of 51,793 doctors (excluding house officers). The number of house officers fluctuate from year to year, and is estimated to be between 3,000 to 4,000.
If one examines the development budget (capex) of MOH in 2026, there is an allocation for PPP/PFI, which is RM2.258 billion. This allocation was shifted to the capex budget in 2021, is for the payments to concession companies providing hospital support services (HSS), and medical equipment enhancement tenure (MEET) in public health and dental clinics.
Therefore, with such a big portion of fixed and growing emoluments and other fixed overheads, the space for the opex budget of MOH to expand for other important components like supply of medicines and other medical supplies will be limited, unless the total budget is expanded.
For capex, with more than one-third allocated for the payment for PPP/PFI in 2026, there is not much left to build new hospitals and clinics, or upgrade exisiting ones.
With continuing demands to increase allowances and perks for health care workers, it is difficult to strike a balance within the limited fiscal space allocated to MOH.
Without controlling the costs and better manage and optimise both human and financial resources, the delivery of health services will continue to be under much constraint.
Therefore, it is imperative that public health delivery services work with the private sector to better manage the overall national health delivery system.
The rakyat need to take charge and manage their health better, and also finance it (at least partly) in order to have a more sustainable health delivery and financing system for the country.
It is only a dream to increase the public health expenditure to 5 per cent of GDP or 20 per cent of the federal government with a small revenue base, limited fiscal space, and falling oil revenue and dividends, amidst the present uncertain global climate.
This is the reality that we have to face for our public health delivery and financing systems.
Chua Hong Teck is an independent public policy and health analyst.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.
