KUALA LUMPUR, April 29 — The Ministry of Finance (MOF) has suggested an RM3.06 billion cut to the Ministry of Health’s (MOH) operating budget for this year.
Free Malaysia Today (FMT) reported today a Treasury directive that proposed cost savings of RM10 billion across the board from various ministries, departments, and agencies, due to the impact of the West Asia conflict.
An RM3.06 billion cut comprises 6.6 per cent of MOH’s RM46.5 billion budget for 2026, leaving the Health Ministry with RM43.4 billion, even less than its RM45.3 billion budget last year.
FMT also reported that the Treasury directive suggested cuts of RM2.39 billion to the Ministry of Higher Education (MOHE), comprising 12.8 per cent of its RM18.6 billion budget.
MOHE operates multiple university hospitals that provide care that’s more expensive than government hospitals under the MOH, but cheaper than conventional private hospitals.
On January 1 last year, Universiti Malaya Medical Centre (UMMC) raised fees for all its services by up to 233 per cent.
There are also reports of medical officers in certain university hospitals, such as those run by Universiti Putra Malaysia (UPM) and Universiti Teknologi MARA (UiTM), who have still yet to receive the new on-call allowance (Etap) rates that came into effect last November.
The FMT report specified other proposed budget cuts of RM664 million from the Treasury, RM647 million (Home Ministry), RM571 million (Rural and Regional Development Ministry), RM508 million (Digital Ministry), RM508 million (Defence Ministry), and RM466 million (Education Ministry).
The Ministry of Education (MOE) received RM66.2 billion for this year, the largest allocation under Budget 2026. MOH was the second biggest.
A cut of RM466 million only makes up 0.7 per cent of MOE’s budget, compared to the 6.6 per cent cut to MOH’s budget.
FMT further reported the Treasury directive as ordering an indefinite delay of new posts and intakes of civil servants, except for critical roles in sectors like health, among others.
All ministries, departments, and agencies have been given until May 15 to submit their proposed spending cuts to the National Budget Office.
Reuters reported that the directive issued today by Treasury secretary-general Johan Mahmood Merican said the government’s public subsidy bill was expected to reach RM58.4 billion this year, far surpassing the RM15 billion originally allocated under Budget 2026.
Nurhisham Hussein, an economic adviser at the Prime Minister’s Office, said recently that Malaysia’s fuel subsidy bill soared to RM6 billion last month, before climbing to RM7 billion this month, amid the US-Iran war. This works out to RM2,300 every second.
Galen Centre for Health and Social Policy chief executive Azrul Mohd Khalib previously predicted budget cuts for health care due to increased government spending on fuel subsidies, such as expanded funding for rare diseases, access to newer treatments, such as for psoriasis, improvements to health worker allowances and incentives, and proposed structural reforms.
In a brief statement today, the MOF confirmed the proposed budget cuts, but didn’t go into detail.
“The Finance Ministry confirms that guidance has been issued to ministries and agencies to revise operating expenditure priorities, in line with challenges from the global energy crisis and rising subsidy burden,” said the MOF.
“This measure is part of a thrifty fiscal approach to optimise government resources in order to maintain continuous support for the people. The Finance Ministry wishes to stress that expenditure revisions will be done without affecting critical services to the people or economic stability.”
Editor’s note: This article was updated with MOF’s statement.
