KUALA LUMPUR (Oct 9): The federal government is again trimming its development expenditure (devex) allocation for the education and training subsector, even as more resources are being set aside to accommodate the two-cohort Year One intake system.
It plans to reduce the sum by RM401 million or 2.9% to RM13.55 billion for 2027, according to the Ministry of Finance's (MOF) latest Fiscal Outlook and Federal Government Revenue Estimates report.
This marks the second consecutive year of reduction in the subsector's allocation, which was previously reduced from RM14.12 billion for 2025 to RM13.95 billion for 2026.
Nevertheless, the allocation remains the largest component of the RM27.99 billion development budget for the social sector, which is set to increase by 2% from 2026's RM27.4 billion.
The social sector also includes the health and housing subsectors.
The government's total development spending for the year is projected to hit RM83 billion — up from RM81 billion for Budget 2026, but still lower than the RM86 billion allocated under Budget 2025. The economic sector remains the largest component of the country's devex, followed by the social sector.
Development spending for education and training next year will focus on upgrading existing school facilities and classrooms, including preparations for the two-cohort Year One intake system.
Meanwhile, the government is setting aside additional funds under operating expenditure (opex) to meet staffing requirements in the education sector following the implementation of the new Year One intake system.
Overall opex is estimated to hit a new record high under Budget 2027, with allocations of RM376.84 billion, or 16.2% of gross domestic product (GDP).
Emoluments, which cover public sector salaries, are projected to increase by 2.9% to RM111.61 billion in 2027, although the ministry's report did not specify how much of the additional allocation would go towards hiring more teachers.
Devex allocations for education and training in 2026 included monies set aside for the construction of new school complexes in Kluang and Johor Bahru, the Technical and Vocational Education and Training (TVET) Training Fund, and the Unimas Teaching Hospital and Primary Care Centre.
Health, housing subsectors to get slightly higher development allocations
The health subsector will receive RM6.91 billion in development funding for 2027, compared with RM6.67 billion for 2026.
Key healthcare projects include a new daycare centre and specialist clinics complex at Hospital Sultanah Aminah in Johor Bahru, as well as a women and children’s block at Hospital Tengku Ampuan Afzan in Kuantan.
The housing subsector is also set to receive a higher allocation of RM1.68 billion for 2027, up from RM1.46 billion for 2026, including to fund preliminary works for new housing projects.