KUALA LUMPUR, June 9 — The creation of new positions in the Ministry of Health (MOH) has been deferred under spending cuts effective last June 1 in a government-wide austerity drive.
MOH secretary-general Hasnol Zam Zam Ahmad wrote in an internal circular last month that the Ministry of Finance (MOF) has suggested that all ministries, departments, and agencies review their 2026 estimated federal expenditure and implement operational expenditure savings from remaining allocations this year based on the following:
- Freeze on salaries and wages for unfilled positions (OS11000 under OA10000 code).
- 10 per cent cut to services and supplies (OA20000).
- 10 per cent cut to assets (OA30000).
- 20 per cent cut to federal statutory bodies (BBP) and companies limited by guarantee (CLBG).
Cuts to current-year spending were instructed amid soaring global oil prices due to the Persian Gulf conflict that has led the federal government to forecast the cost of subsidies to soar to RM58.4 billion this year, nearly four times higher than the approved RM15 billion allocation, he noted.
“In line with that, the Ministry will review the remaining allocations of each Responsibility Centre (PTJ), existing commitments, projected funding needs, and unforeseen requirements until December 31, 2026,” said Hasnol Zam Zam in a May 25 circular, as sighted by CodeBlue.
PTJ refers to a facility, or cost centre, that is empowered to collect revenue, make procurement, and possess adequate accounting personnel.
The MOH secretary-general’s circular listed 10 cost-saving measures. These included the postponement of the creation of new positions, except through trade-offs or redeployment without additional financial implications. Trade-offs mean the elimination of a position to create another.
Freezing the creation of new positions is arguably the most significant austerity measure to hit the health service, as the MOH grapples with reported shortages of doctors and service disruptions or delays across at least five hospitals over the past two weeks.
These included Segamat Hospital, Mersing Hospital, and Sultanah Aminah Johor Bahru Hospital in Johor; Lahad Datu Hospital in Sabah; and Tumpat Hospital in Kelantan.
Hasnol Zam Zam’s circular also listed stricter control over overtime allowance (ELM), in which claims are only permitted for the implementation of “critical and urgent” tasks, subject to prior approval by the head of department.
ELM is given to members of the implementation or support group of Grades 40 and below in the federal civil service. In a statement last April, Senator Dr RA Lingeshwaran urged the government to uphold the rights of paramedics and ambulance drivers to ELM payment or replacement leave for on-call duties.
The full list of the MOH’s cost-saving measures, which were to take effect from June 1, 2026, are as follows:
1. Cancellation of festive open houses
All MOH responsibility centres (PTJs), including federal statutory bodies (BBPs), government-linked companies (GLCs), and government-linked investment companies (GLICs), are not permitted to organise festive open house events.
2. Postponement of government events, functions, celebrations, meetings, conferences, seminars, and workshops
All PTJs are required to postpone the organisation of government events and official functions; ceremonies and celebrations; meetings and conferences; and seminars and workshops.
Where necessary, the PTJ head must ensure that the programmes are conducted in a modest manner by prioritising organising the events in government offices, public training institutes, existing government facilities, or private premises rated three stars or below.
Organisers must select locations based on where most participants and organisers are located to minimise transport and travel claims. They must use package arrangements covering venue, accommodation and meals; and avoid the “pay and claim” method.
The postponement was to take effect from last June 1, except for mandatory seminars or workshops related to confirmation of service; mandatory departmental seminars, workshops or examination sessions; and programmes involving the minister, deputy minister, secretary-general, or Director-General of Health.
3. Restrictions on overseas visits and travel
All PTJs must limit overseas travel to scheduled meetings only and those that genuinely require physical attendance and cannot be conducted online.
Additional requirements include keeping delegation sizes to the necessary minimum and keeping the cost of travel to approved 2026 expenditure ceilings. Any additional costs must be offset through savings or trade-offs elsewhere.
Overseas courses not yet contractually committed and which can be cancelled without legal or financial consequences must be postponed.
Transfer of allocations to fund overseas official duties or overseas courses is not permitted.
4. Restrictions on domestic official travel and courses
All PTJ heads must ensure domestic official travel is restricted to essential purposes only, with a minimum number of officers required and cost-saving travel arrangements, besides encouraging PTJs to hold online meetings whenever possible. This also applies to training and courses.
5. Postponement of the creation of new positions and additional MyStep quotas
The creation of new positions is postponed, except through trade-offs or redeployment with no additional financial implications.
Additional quotas under the MyStep (Short-Term Employment Programme) are postponed until further notice, subject to service requirements and approval from relevant authorities.
6. Energy-saving measures
PTJs, including BBPs, GLCs and GLICs, must implement energy-saving measures, including setting air-conditioning temperatures at not lower than 24°C in offices and meeting rooms and switching off lights and electrical equipment when not in use, especially during lunch breaks and after office hours.
7. Savings on utilities and consumables
The PTJ1 head must ensure that PTJs 1/2/3 reduce expenditure on telecommunications, electricity and water; optimise use of consumables such as stationery, paper, printer cartridges, and similar items to avoid wastage; and ensure comprehensive digitalisation of meeting documents, including the use of electronic documents for meeting papers, meeting minutes, document distribution, and storage of official records.
8. Optimisation of medicine usage
The PTJ1 head must ensure that PTJs 1/2/3 follow the Ministry’s generic-first policy by encouraging the use of generic medicines to ensure access to quality medicines at appropriate prices, without compromising safety and effectiveness.
Strengthen medicine usage controls by ensuring that drug prescriptions and supplies are given based on reasonable clinical needs and in compliance with guidelines and formularies set by the MOH.
Continuously monitor medicine usage to avoid wastage and to reduce the risk of excess stock and drug disposal, besides ensuring that financial allocations can be used more efficiently without affecting treatment quality or patient safety.
9. Prudent laboratory testing
The PTJ1 head must ensure that PTJs 1/2/3 only conduct laboratory investigations that are supported by genuine clinical need and reasonable medical justification. Prudent and controlled lab testing will help reduce wastage, optimise hospital operating costs, and ensure that current resources can be used more effectively without affecting treatment quality or patient safety.
10. Overtime allowance
Elaun Lebih Masa (ELM) claims must be controlled, in which overtime claims are only permitted for critical and urgent tasks that can’t be delayed, with prior approval from the head of department, in line with the current ELM implementation policy.
“In line with the mitigation measures and strengthening of MOH’s financial management as listed above, all PTJ1 heads must ensure optimal usage of allocations for all PTJs under their supervision,” wrote Hasnol Zam Zam.
“PTJ1 heads are also required to align and redistribute the remaining allocations at each PTJ according to pressing needs and priorities.”
The secretary-general’s circular was distributed to heads of divisions, state health departments, and institutes, among others.
His circular did not specify estimated savings for the 10 austerity measures listed. Health Minister Dzulkefly Ahmad said last month that he expected a 10 per cent cut to MOH’s RM46.5 billion budget this year, equivalent to RM4.65 billion.
