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"THE well-being of the people is the highest law," declared Prime Minister and Finance Minister Dato’ Seri Anwar Ibrahim in Parliament on Friday, as he presented Malaysia’s fourth budget.
At the heart of the RM15 billion Budget 2026 lies a historic claim: hardcore poverty in Malaysia has been reduced to just 0.09 percent, affecting around 7,000 households nationwide — a near-eradication of extreme poverty for the first time in the country’s history.
"This is the tangible result of the MADANI struggle," Anwar said, referring to the government’s comprehensive socioeconomic agenda. The achievement follows a recalibration of the Food Poverty Line from RM1,198 in 2022 to RM1,236 in 2024. The remaining cases are targeted for resolution by year-end.
Social enterprises featured prominently in the Budget presentation. The budget briefcase carried by Anwar was hand-made by artisan Anthony Liew You Chung using upcycled nitrile gloves and discarded textiles, crafted through social enterprises Heart Treasures and Tanoti.
The government is proposing to extend income tax exemptions for social enterprises until 2028. RM120 million will be allocated as matching grants to encourage GLIC and GLC foundations to collaborate on efforts addressing urban poverty, homelessness, and the reintegration of individuals from government protection homes.
The state-owned BSN has been recognised for promoting cashless businesses and supporting entrepreneurs in correctional facilities. RM50 million has been set aside for microentrepreneurs, night market vendors, and student start-ups through grants, tents, PA systems, and QR payment tools.
Acknowledging the persistent burden of living costs, Anwar said cash aid will be expanded. In 2025, the government allocated RM13 billion for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), reaching nearly nine million recipients.
To coincide with Deepavali celebrations, the RM2 billion STR Phase 4 payment — originally scheduled for November — will be brought forward to 18 October. Toll discounts of 50 percent for two days have also been approved.
SARA, with a 98 percent usage rate, has strengthened local micro-retailers by enabling aid to be spent on essential goods in small community shops. The programme will expand to include more rural outlets and locally sourced products.
In 2026, all nine million STR recipients will receive SARA payments of up to RM100 monthly, or RM1,200 annually. One million e-Kasih households will receive RM200 per month, while single individuals will be eligible for RM600 per year.
The maximum a household can receive under STR and SARA is RM4,600. For example, a family earning below RM2,500 with five children qualifies for RM2,200 under STR and RM2,400 under SARA.
To provide additional relief, a one-off RM100 SARA credit will be distributed in February 2026 to 22 million Malaysians aged 18 and above, timed to coincide with Ramadan and Chinese New Year preparations.
Anwar stated that these measures were made possible by savings from subsidy rationalisation, particularly on diesel and RON95 fuel.
Responding to anticipated questions on ethnic equity, Anwar provided a breakdown of how aid is distributed. STR and SARA allocations for Malays rose from RM4.5 billion in 2022 to RM7.1 billion in 2025. Bumiputera in Sabah and Sarawak received RM1.9 billion, up from RM1.1 billion.
Indian communities received RM1 billion, up from RM600 million. Housing loan guarantees under SJKP rose from RM2 billion to RM12.3 billion for Bumiputera, and from RM200 million to RM1.9 billion for Indians.
Indian communities also accessed RM220 million through MITRA, TEKUN and AIM. Meanwhile, Chinese SMEs received over 75 percent of SJPP guarantees: RM11.9 billion in 2022, RM13.4 billion in 2023, and RM13.9 billion in 2024.
The Social Welfare Department distributed RM3.1 billion to more than 560,000 beneficiaries, an increase from RM2.9 billion previously.
Anwar also announced RM1 billion to address cost-of-living concerns, including RM600 million to expand the Payung RAHMAH programme across all state constituencies.
To support remote communities in Sabah and Sarawak, RM250 million will subsidise the delivery of essential goods to isolated locations such as Taradas (Kudat), Kawayoi (Kinabatangan), Entaroh (Kapit), and Nanga Segeris (Sibu).
New social protection measures target informal workers, particularly those in the gig economy. Under i-Saraan Plus, e-hailing and p-hailing workers will receive matching EPF contributions of up to RM600 per year, with a lifetime cap of RM6,000. Regular i-Saraan contributors will continue to receive RM500 annually.
With the implementation of the 2025 Gig Workers Act, all gig workers are now required to contribute to SOCSO. The government will subsidise 70 percent of SOCSO contributions for first-time registrants in non-mandatory sectors, and 50 percent in the second year.
To support jobseekers, relocation grants of up to RM1,000 will be offered. The i-Suri eligibility age will be extended to 60 years, in line with the national retirement age.
SOCSO will expand its rehabilitation centres in Melaka, Perak, Terengganu and Pulau Pinang, raising total bed capacity to 250. The dialysis allowance will also be increased from RM150 to RM170 per session, requiring an additional RM52 million annually.
With Malaysia expected to become an ageing nation by 2043, the government will launch the National Ageing Blueprint 2025–2045 at the ASEAN New Frontiers on Care conference this November.
Welfare support for the elderly will be increased to RM1.26 billion, benefiting 180,000 recipients through allowances, community engagement and care support.
As part of the 13th Malaysia Plan, the government will implement a national care service framework, officially recognising caregiving as a professional occupation. RM5 million will be provided for caregiver training through TVET under the Women, Family and Community Development Ministry.
KWAP, through a RM300 million commitment, has initiated a senior housing project on Baitulmal land in Kepala Batas, Penang, in collaboration with the state Islamic Religious Council. Similar projects are under review elsewhere.
To build capacity in the elder care sector, double tax deductions will be extended to companies sponsoring training for persons with disabilities and certified care workers.
Budget 2026 reflects Anwar’s Belanjawan Rakyat framework — aiming to uphold the dignity of ordinary Malaysians, support vulnerable groups, and create a robust and inclusive social safety net as Malaysia navigates future demographic and economic transitions. - October 10, 2025