Translated from the original speech in Bahasa Malaysia. In case of any discrepancy, the Bahasa Malaysia version will prevail.

Speech
The Fifth Madani Budget
2027
by:
Datuk Seri Anwar Ibrahim
Prime minister and minister of finance
introducing
The Supply Bill (2027)
in the Dewan Rakyat
Friday, Oct 9, 2026
corresponding to 27 Rabiulakhir 1448 Hijrah
"The Fifth Madani Budget: Reaching for the skies, while anchored on our values"

Tan Sri Speaker Sir,

I beg to move that the Bill intituled “An Act to apply a sum from the Consolidated Fund for the service of the year 2027 and to appropriate that sum for the service of that year” be read a second time.

Bismillahirrahmanirrahim
Assalamualaikum Warahmatullahi Wabarakatuh,
Salam Sejahtera.

Tan Sri Speaker, honourable members of this House and my fellow Malaysians, whom I hold dear,

1. Before I proceed, I extend my heartfelt thanks to everyone who made the Formula One Gulf Air Bahrain Grand Prix in Malaysia 2026 such an orderly and resounding success. Beyond the F1 crews, the event was carried by thousands of volunteers and civil servants. It shows that when we join forces as one, in the spirit of segulai sejalai, Malaysia can triumph on the world stage. So too at the 20th Asian Games, where we matched our best-ever showing, with medallists drawn from every race — proof that we are at our finest when we draw strength from every community.

The nation is proud of you!

2. Every age gives a nation its own canvas on which to paint a bolder, more inclusive landscape. Yet there are moments in the folds of history when a nation is asked not merely to manage what it has, but summoned to widen the horizon of its ambition, steel the confidence of its people and shape the future together, with a clear and profound grasp of the spirit of the age — the zeitgeist.

3. As Allah SWT reveals in Surah al-Hashr, verse 18:

“O you who believe, be mindful of Allah, and let every soul look to what it has sent ahead for tomorrow. And be mindful of Allah; indeed, Allah is fully aware of all that you do.”

4. The word lighad — “for tomorrow” — carries a demand both vast and profound. No person, no community and no nation can live by managing today alone. We are called to think ahead and to lay firm foundations for the future: to test those foundations, to ask which doors we are opening or widening, and to weigh the legacy we will leave to the generations to come.

5. True progress is measured not by how far we travel, but by what we carry together along the way: human dignity, strong families, a fair chance for each generation to rise, the integrity of our institutions, and the conviction that effort will be repaid with opportunity. It is not enough to inherit our strengths. We must enlarge them, until they become a greater legacy for those who follow.

6. The British philosopher and historian of ideas Sir Isaiah Berlin borrowed an ancient image, simple yet sharp and profound: the hedgehog and the fox. The fox knows many things; the hedgehog knows one big thing. A nation needs both. A nation must hold to one great and constant ambition: a purpose that gives the journey its direction and meaning. The economy demands growth and distribution; technology, innovation and protection; public finances, discipline and compassion; development, speed and wisdom. A nation thus needs the hedgehog’s steadfastness of direction and ambition, and the fox’s ingenuity in finding the paths and the means to realise them.

7. The great Islamic thinker and jurist al-Mawardi, in his reflections on the culture and conduct of government, held that power cannot stand on its own without order, law and responsibility. Government acquires meaning only when the trust of power is exercised justly, when institutions function as they should, and when the interests of the many are protected.

8. Today, that is our test. The world grows ever more turbulent. War, great-power rivalry and a disrupted climate are driving up the price of food and the cost of energy. Supply chains we long took for granted are fraying, testing the security of our food and our supplies. Artificial intelligence is rapidly reshaping trade, energy, work and life itself. Yet great change brings not only anxiety. It also opens doors for nations bold enough to read the times, master new knowledge and prepare their people early.

9. Malaysia must not merely weather change. We must have the confidence to shape it. Before us lie the opportunities to leap ahead in semiconductors, artificial intelligence, new energy, the digital economy and high-value industries; to raise productivity and wages; to strengthen local enterprise; and to ensure that young Malaysians are not mere consumers of change, but creators of progress itself.

10. A truly successful economy, then, is not one that merely grows, but one that answers to the lives of its people.

11. So our question is not simply how large an economy we wish to build, but whether that growth opens room for families to save, for workers to 5 earn more dignified wages, for small businesses to keep growing — and for every one of them to reach for the skies while staying rooted to the ground.

12. And so let it be said plainly: a national budget is a moral statement — the national covenant of a responsible government.

13. Malay thought has long placed justice and trust at the very heart and lynchpin of government. The classical Malay poet and historian Raja Ali Haji, in Gurindam Dua Belas (1847), wrote:

Hukum adil atas rakyat,
Tanda raja beroleh inayat.

(Just laws upon the people/mark a ruler blessed with grace.)

14. These terse lines carry a meaning that is vast and lasting: that power is measured not by the grandeur of one’s station, but by the justice the people can feel. Authority worthy of the name is not merely strong. It knows that power must always walk hand in hand with trust and accountability.

Raja mufakat dengan menteri
Seperti kebun berpagarkan duri.

(A ruler in counsel with his ministers/is a garden fenced with thorns.)

15. In our tradition, the bond between those who govern and those who are governed has never rested on power alone. It is anchored in waad – a covenant, in which loyalty must be answered with justice, and power must be fenced in by trust.

This is our national covenant.

16. That the nation will not abandon those crushed by hardship. And that every Malaysian child, whatever their family, region or station, has the right to see their potential, and to reach it.

17. Nor is this covenant one-sided. The nation provides the room and the opportunity; the rakyat fill it with knowledge, work, creativity and courage. The government keeps its trust; the rakyat strengthen the nation through effort and excellence.

It is a duty history has laid upon us.

18. Yet that duty is not a burden to be shouldered in gloom. It is our generation’s chance to leave behind a nation stronger than the one we inherited: with institutions more trusted, an economy more diverse, and young people with greater room to forge their own future.

19. History is not carved by great names alone, but by the millions who work every day: who teach and who heal, who trade and who create, who till the soil, who care for their families and build their lives.

20. The measure of a budget, then, lies not in the thickness of its pages, the size of its allocations or the number of its announcements. The measure is far more fundamental: are more Malaysians able to live with dignity, and will the Malaysia we hand to the next generation be fairer than the one we inherited? If the answer is yes, that is true progress. In the conviction that economic strength must, in the end, ennoble the human spirit; that growth must bear the fruit of justice; that reform must restore trust; and that every generation must bequeath a better nation than the last, I hereby present the Madani Budget 2027: a generation’s endeavour to strengthen the nation’s order, and to keep our promise, our national covenant, with the future. Fighting corruption and leakages, managing the deficit responsibly and strengthening the structure of our economy are not optional extras in the business of government.

21. Approaching its fourth year, the Madani government has set the direction and policy framework of Ekonomi Madani, followed by bold reforms that are now bearing fruit.

22. And so the Fifth Madani Budget marks the next step towards a great ambition for the face of Malaysia in the years ahead. As reform presses on without fear, the fruits of growth, and every ringgit saved through reform, must return to the rakyat as greater benefits.

23. In line with the Ekonomi Madani Framework and the 13th Malaysia Plan 2026-2030, this budget is our national covenant for reaching for the skies, while anchored on our values, built upon eight principal foundations. Today, I have chosen to present the broad framework and the key announcements. For the rest, the full text and its annexes, as circulated, are authoritative.

24. The cost of living remains a pressing issue that weighs heavily on the rakyat. Recognising this, the government remains committed to improving existing policies to ensure that the well-being of the rakyat continues to be given priority.

25. The total provision for subsidies, assistance and incentives is expected to exceed RM80 billion next year. Of this amount, fuel subsidies are expected to remain high at RM40 billion, while nearly RM3.3 billion will be allocated for assistance through the Social Welfare Department (JKM).

26. I am pleased to announce that the government will increase the allocation for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) to RM16 billion in 2027, compared with RM15 billion previously.

27. The government remains committed to strengthening Jualan Rahmah Madani and Jualan Agro Madani programmes. Accordingly, the allocation for these programmes will be increased from RM630 million to RM750 million, with a target of 35,000 programmes nationwide,

28. The distribution of essential goods to rural and remote areas will be expanded for the benefit of the rakyat, with an allocation of RM250 million. This covers six new locations, including Kampung Terian, Penampang, Sabah and Kampung Dato’ Godam, Batang Lupar, Sarawak.

29. The government recognises the concerns of the middle-income group, the M40, who continue to bear the burden of the cost of living with patience and resilience. In this regard, I am pleased to announce the following measures:

First: The individual tax relief threshold, which has not been reviewed since 2010, will be raised from RM9,000 to RM12,000.

Second: Income tax rates for resident individuals will be reduced by one percentage point.

Third: Individual tax reliefs will also be expanded:

30. At the same time, the government remains committed to progressive taxation. Accordingly, the tax rate applicable to high-income earners with income exceeding RM1 million will be adjusted to 30%.

31. Collectively, the increase in tax relief and reduction in individual income tax rates will provide approximately five million taxpayers with additional disposable income of up to RM1,600.

32. Narrowing the gap between productivity and workers’ wages must remain a priority. The pressure on the cost of living becomes an increasingly heavy burden when income growth fails to keep pace with increases in the prices of goods. This concern is reflected in Malaysia’s labour compensation share of GDP, which remains relatively low at 33.9%.

33. In relation to wages, the government will make further efforts to curb the employment of undocumented foreign workers. Companies other than MSMEs may only claim tax deductions on wage expenditure if wages are paid through bank accounts permitted under the Employment Act 1955. Tax deductions for other expenditures will not be subject to this requirement.

34. An estimated 600,000 Malaysians make their living as ehailing and p-hailing drivers. The Madani government will pursue a more comprehensive approach to the protection of gig workers.

35. To strengthen social protection, every citizen will be automatically registered as an EPF member upon reaching the age of 18, enabling retirement savings to begin earlier.

36. When we say we are reaching for the skies, while anchored on our values, we mean raising each state’s economic ceiling and dismantling the structural barriers that have held the rakyat back for far too long. We are putting our money where our mouth is. But let us be clear: equity does not mean treating unequal circumstances as if they were equal. The American philosopher John Rawls called this justice as fairness. He began by asking whether justice should be judged by the greatest good for society as a whole, or by an order that is truly fair to every single person. In A Theory of Justice (1971), he invites us to imagine choosing the rules of society without knowing whether we would be born rich or poor, at the top or on the margins, blessed with advantages or burdened by want — what he called the original position, behind a veil of ignorance.

37. That is how we have approached allocations to the states. Developed states can keep surging ahead. Developing states get room to pick up the pace. And regions still lagging behind are given the strength to close the gap. That is what equity means: not every state getting the same, but every state getting what is fair and reasonable, so that its people can move forward too.

38. The Malaysia Agreement 1963 is a national covenant, one the whole nation must honour.

39. For decades, the special grant failed to keep pace with the development needs of Sabah and Sarawak. The Madani government has raised it on three occasions, and the latest interim rate stands at RM1.5 billion, to be paid in full before the year is out. Negotiations with Sabah and Sarawak continue towards a fair and sustainable annual formula.

40. Twelve MA63 matters have been resolved under the Madani government, including:

41. In 2027, Sabah and Sarawak will once again receive the highest federal allocations. Sabah will receive RM18.7 billion, up from RM17.6 billion this year, and Sarawak RM16.2 billion, up from RM15.1 billion.

42. The government has agreed to double the number of JPA sponsorship offers for Sabah- and Sarawak-born students. This means 4,200 young people from Sabah and Sarawak will be able to go on to university every year.

43. The Sarawak government has shown real commitment to developing the Sibu Special Economic Zone. The federal government will begin formal negotiations to finalise its incentive framework, a one-stop investment facilitation centre and its strategic infrastructure needs.

44. The government has agreed to install Statcom systems at the Dam Road and Segaliud main intake substations, at a cost of RM204 million. Meanwhile, the Southern Link Transmission Line project will continue as a long-term measure to secure Sabah’s electricity supply.

45. Road projects in Sabah and Sarawak will continue, with an allocation of RM3.3 billion for 2027. The letter of acceptance for the Miri section of the Trans Borneo Highway has been issued, while those for the Limbang and Lawas sections are expected by the end of this year. The Sarawak-Sabah Link Road 1 and Pan Borneo Sabah Phase 1B are targeted for completion by the end of next year. Of federal road maintenance spending, RM350 million is set aside for G1-G4 contractors in Sabah and Sarawak.

46. Skyscrapers do not make Kuala Lumpur. The capital’s soul lies in stalls and warung that are comfortable and safe, in liveable homes for the rakyat and in a heritage with a pulse — a stage for culture that draws visitors in.

47. The allocation for rural road projects will be increased to RM2.3 billion, compared with RM1.3 billion in 2022.

48. In total, RM3.3 billion is allocated for basic rural infrastructure projects, including village street lights, community facilities and the supply of clean water and electricity.

49. Tenaga Nasional Bhd (KL:TENAGA) is lighting up villages with solar street lamps and fitting rooftop solar panels on welfare homes and houses of worship. Electricity supply is also being improved at tahfiz schools, pondok and Orang Asli settlements.

50. The Madani administration has brokered a 40-year bulk water supply agreement between the state governments of Perak and Penang.

51. Access to clean water nationwide continues to improve through the National Non-Revenue Water Reduction Programme, at a cost of RM2.5 billion, with a focus on replacing 1,900km of critical, ageing pipes.

52. The Jendela project is strengthening the nation’s internet connectivity, with a total investment of RM5 billion. So far, we have extended Wi-Fi coverage to every public university campus and 4G to every Felda settlement. Next year, our focus is to bring 4G to every Orang Asli village, ensure internet access along 7,000km of roads and 1,700km of railway, and roll out the Madani Submarine Cable (Salam).

53. Bandar Madani Bukit Jalil will be developed as a residential area for the rakyat, complete with amenities including a vertical school. Registration for Phase 1 will open this Monday.

54. Nearly RM1 billion will be provided for projects such as Rumah Mesra Rakyat and Program Residensi Rakyat. Four new housing projects will be carried out in: Kulai, Johor; Nilai, Negeri Sembilan; Paya Rumput, Melaka; and Pertang Valley, Terengganu.

55. SJKP will provide housing financing guarantees of up to RM20 billion, opening the door to home ownership for 80,000 first-time buyers, particularly the self-employed without fixed income.

56. The government proposes a full stamp duty exemption on loan agreements and instruments of transfer for first homes priced up to RM500,000. For homes priced up to RM750,000, the first RM500,000 will be fully exempt from stamp duty, and the balance 50% exempt. This applies to sale and purchase agreements executed from Jan 1, 2027 to Dec 31, 2030.

57. Towards zero abandoned housing projects by 2030, a full stamp duty exemption will be given on loan agreements and instruments of transfer executed by rescuing contractors or developers, as well as by original purchasers. This exemption is effective from Jan 1, 2027 to Dec 31, 2030.

58. Since 2024, Kampung Angkat Madani and Sekolah Angkat Madani have reached nearly 500 villages and 1,700 schools.

59. In 2027, the government will roll out Komuniti Angkat Madani with an allocation of RM50 million, this time focusing on urban PPR communities. The top management of ministries and agencies will be entrusted to lead it. Universities and TVET institutions will bring in the skills PPR residents need, and we will provide shared kitchens, business equipment and training to help residents earn more.

60. The allocation for repairing infrastructure in Kampung Baru Cina will be increased to more than RM100 million, including to refurbish and rebuild dilapidated facilities.

61. The allocation for the maintenance of registered non-Muslim houses of worship will also be increased to RM80 million.

62. GLIC and GLC foundations will put up a RM100 million matching grant, among others to strengthen the childcare ecosystem and train 6,000 childcare providers in more than 50 new areas across nine states.

63. The government will introduce a tokenised retail savings sukuk. Through blockchain technology, ordinary Malaysians will be able to invest in government sukuk and choose where their money goes: education, healthcare or social protection for the poor. In other words, the rakyat will be able to put their savings where their priorities are.

64. The allocation for small projects in local authority areas will be increased to nearly RM700 million, covering upgrades to parks, public toilets and stalls.

65. The government remains steadfast in its commitment to empowering the Bumiputera economy. The Bumiputera agenda is being driven through an inclusive approach under Bumiputera Economic Transformation Plan 2035 (PuTERA35).

66. The government has gazetted 50 acres of land in Kuala Lumpur as Malay reserve land, a first for any previous administration. PETRONAS has now commenced development of the first 10 acres to provide affordable housing.

67. The government first provided an endowment of RM200 million to Yayasan Pelaburan Bumiputra in 1978. No further endowments have been provided since 1981. Therefore, honouring the pledge to empower the Bumiputera economy and ownership, The government agrees to provide 50 acres of strategic land in the Kuala Lumpur area, valued at RM1 billion, as a new endowment to Yayasan Pelaburan Bumiputra. The intent is for this land to be developed by Permodalan Nasional Bhd (PNB), taking into account the need for affordable housing as well as Bumiputera interests.

68. We have also agreed that nearly 11 acres of government land in Belfield, Kuala Lumpur, will be developed to build at least 2,500 units of Rumah Madani, with 70% reserved for Bumiputera.

69. I have held engagement sessions with representatives of Bumiputera associations and contractor companies to hear first-hand their concerns about the challenges facing their businesses. I am pleased to announce:

70. GLICs will invest RM2 billion to empower Bumiputera companies. For instance, Ekuiti Nasional Bhd (Ekuinas) and Pelaburan Hartanah Bhd (PHB) will assist Bumiputera companies towards public listings and reinforce strategic property ownership, while a RM250 million Dana Ciptawan will be established by Khazanah and Teraju to support the growth of mid-tier Bumiputera companies.

71. A centralised solar park for government buildings will be developed with an investment of RM1.5 billion. This will also create opportunities for Bumiputera construction, engineering and maintenance companies. Under the Large Scale Solar programme (LSS6) solar project, 150 megawatts will be allocated to Bumiputera companies to support their participation in the clean energy industry.

72. The 10 Bumiputera Champions initiative will continue, with an allocation of RM40 million to develop 15 high-potential companies by 2027.

73. Malaysia continues to strengthen its position as a global leader in the Islamic economy.

74. The government will step up efforts to prepare the nation for an ageing society:

75. Meanwhile, assistance for senior citizens will be increased to RM1.3 billion, benefitting nearly 200,000 elderly individuals.

76. EPF members who reach the ages of 55 and 60 can opt for the i-Emas scheme to receive monthly withdrawals, allowing their remaining savings to continue earning dividends.

77. For persons with disabilities (PWDs), I am pleased to announce:

78. The Department of Orang Asli Development (JAKOA) will be allocated RM445 million. This includes the implementation of new projects such as:

79. In Kinta, Perak, some Orang Asli children live far from school and are at risk of dropping out because of the difficulties of commuting daily. The government has agreed to build a dedicated hostel with 100 places for these children.

80. Since 2023, the Madani government has helped more than 250,000 rakyat emerge from the burden of bankruptcy.

81. The allocation for the Ministry of Health will increase to RM47.7 billion, compared to RM46.5 billion.

82. I am pleased to announce that the issue of contract doctors will be addressed. Since 2023, the Madani government has appointed over 15,000 contract doctors to permanent positions, including 4,000 this year. for 2027, more than 9,000 contract doctors will be offered permanent posts. This means that moving forward, medical officers who successfully complete their housemanship training will be offered permanent appointments as medical officers.

83. In recognition of 47,000 paramedics and nurses who shoulder immense responsibilities on the ground, the post basic incentive allowance (BIPB) rate will be increased from RM100 to RM200 per month.

84. We grieve the tragic crash of the Flying Doctor Service helicopter in Long Lellang, which claimed the lives of frontliners. The government agrees to increase the air healthcare service incentive allowance from RM30 to RM100.

85. To reduce waiting times for patients receiving treatment:

86. The government will launch the MediAsas plan beginning January 2027, at an affordable price. Under this plan, hospital charges will be based on diagnosis and treatment categories to ensure costs are better controlled and predictable. EPF members under the age of 55 will be permitted to pay MediAsas premiums through their Sejahtera Account. For SMEs with fewer than 75 employees, the government will subsidise the first-year premium by RM200 per employee, capped at 50 employees per company. This is expected to benefit up to 200,000 workers.

87. Transparency in private treatment costs will be enhanced: Electronic medical records will be expanded based on the one individual, one record principle. Beginning 2027, private hospital billing will adopt standardised and transparent fee categories so that patients clearly understand each charge and price distortion can be reduced. The e-CKAPS portal is also being developed to enable full online licensing for private healthcare facilities starting in 2027, targeting a reduction in processing times of up to 65%.

88. The government is also providing healthcare facilities to assist underprivileged rakyat in receiving medical care.

89. Nine new facilities will be constructed, including:

90. All public hospital and clinic infrastructure will be maintained and repaired with an allocation of RM1.2 billion. This includes upgrading remaining dilapidated clinics.

91. More than RM770 million is provided for the procurement of advanced and modern equipment to expedite diagnosis and treatment. This includes:

92. The great Tamil poet Thiruvalluvar, in verse 731 of his celebrated work Tirukkural, wrote:

“தள்ளா விளளயுளும் தக்காரும் தாழ்விலாச்சசல்வரும் சசர்வது நாடு.”

"Thallaa Vilaiyulum Thakkaarum Thaazhvilaach Chelvarum
Servadhu Naadu."

The verse speaks of a great nation: one blessed with fertile lands, a people rich in knowledge and virtue, and prosperity that does not come at the expense of moral character. Even in ancient times, Thiruvalluvar understood that a nation's greatness rests not merely on its wealth and monuments, but on the wisdom, justice and human dignity that sustains it.

93. The Ministry of Education continues to receive the highest allocation, at nearly RM69 billion, compared to RM66.2 billion this year.

94. The government agrees to increase the allocation to repair and maintain all types of schools from RM1 billion to RM2 billion. This increase means:

95. Meanwhile, nearly RM1.3 billion is provided to upgrade 682 dilapidated schools, particularly in Sabah and Sarawak.

96. Records show that nearly 500 thousand pupils are expected to enter Standard One next year, including over 70,000 aged six. To accommodate the increase in Standard One pupils, 3,500 additional classrooms are expected to be completed by the end of this year using the Industrialised Building System (IBS).

97. Encouraging public participation in creating quality school environments: Tabung Sumbangan Wang Awam Sekolah will be enhanced so that voluntary contributions from parents, alumni and the public can be utilised for school operations, facility repairs, equipment procurement and student programmes. Cash contributions to this fund will be eligible for a tax deduction of up to 10% of aggregate income.

98. I am pleased to announce:

99. Teachers must return to their core duty of educating and shaping the minds and character of our children, unburdened by clerical work. The recruitment of teaching assistants will be expanded to 200 high-density primary schools and will be progressively scaled up following an evaluation of its effectiveness.

100. The Ministry of Higher Education (MOHE) will introduce a comprehensive legal framework for higher education to replace the Universities and University Colleges Act (UUCA), covering university autonomy, academic freedom and the rights of students. With immediate effect, all disciplinary proceedings at public universities relating to freedom of expression, the expression of views, public criticism and peaceful assembly are hereby discontinued.

101. The Ministry of Higher Education is allocated RM19.1 billion.

102. PTPTN has been a lifeline for young Malaysians aspiring to pursue higher education.

103. To address student accommodation issues, the government is collaborating with GLICs to accelerate project implementations.

104. Every university student must be assured of meal provision. Therefore, the Dapur Siswa Madani programme will be expanded to polytechnics and teaching education institutes with an allocation of RM20 million. This initiative will provide cooking equipment, food item contributions and Menu Kasih Siswa priced at just RM5.

105. Tax deductions will be provided to parties contributing food and equipment for this purpose from Jan 1, 2027 to Dec 31, 2030.

106. The FLYsiswa Madani 2027 flight ticket assistance is increased to RM500 from RM400, benefitting over 60,000 public higher education students.

107. To all public transport commuters:

108. On Merdeka Day, four people tragically lost their lives, including a couple and their young child, in a crash on LPT1 in Temerloh. As of August this year, 28 fatal cases were recorded involving drivers under the influence of alcohol or drugs. Such tragedies grieve us deeply, demonstrating that while enforcement has been tightened, traffic violations remain concerning. Therefore, as a firmer measure:

109. The Special Task Force on Agency Reform (STAR), led by the chief secretary to the government, has dismantled bureaucratic red tape and reduced compliance costs. Nearly RM25 million is provided to expedite government transactions with the rakyat and businesses.

110. On the same note, Program Iltizam Kecekapan Perkhidmatan Kerajaan improves the performance of federal and state departments and agencies as well as local authorities (PBT), particularly at customer service counters dealing directly with the rakyat.

111. I hear the concerns faced by construction contractors affected by rising operating costs. Therefore:

112. We are grateful that our country has remained resilient against the impact of the Middle East Conflict. However, we must expedite the energy transition to ensure the long-term sustainability of the nation’s energy supply.

113. To encourage greater adoption of green and sustainability technology among companies, tax incentives will be enhanced and extended until Dec 31, 2030:

114. The five season in two years paddy cultivation project is crucial to ensuring the continuity of the nation’s rice supply. Currently, upgrading works on irrigation systems across 15 paddy field blocks are progressing according to schedule. Meanwhile, the Pedu Dam rehabilitation project is expected to be completed by end-2027.

115. The collaboration between the federal government and state governments on agri-food projects is achieving significant outcomes at the community level. These collaborations will be further intensified with an allocation of RM300 million. Among the successful projects is the red tilapia farming in Batang Ai, Sarawak, which supports the production of up to 7.2 million fish fingerlings annually, benefitting nearly 200 small-scale livestock farmers. The dairy project in Mersing, Johor, is targeted to contribute 50% of Johor’s milk production by 2030.

116. For paddy farmers:

117. For fishermen:

118. Agropreneurs will have access to over RM1 billion in financing through Agrobank, Bank Rakyat and Suruhanjaya Koperasi Malaysia. This will support higher agricultural output, including through technology adoption. More than RM40 million will be provided to support the production of high-value products using modern technology. These include premium bean-to-bar chocolate, agarwood oil extracts, and aromatherapy products.

119. Last month, I had the opportunity to engage with smallholders and commodity producers. Therefore, I wish to announce the following:

120. The progress Felda has made is increasingly felt by settlers. A total of 109,000 settlers now hold land titles, while the average monthly net income of settlers has increased from RM2,272 in 2023 to RM3,800 this year. The delisting of FGV has also strengthened Felda's financial position to safeguard the welfare of settlers. For 2027, the government has approved RM1.26 billion to strengthen Felda's finances, maintain roads and provide housing for the Felda generation.

121. The Ministry of Home Affairs (KDN) and the Ministry of Defence will each receive an allocation of RM22 billion.

122. Malaysia will continue to strengthen its border security.

123. The MCMC has blocked more than 5.7 billion scam-related calls and SMS messages. For earlier detection of scammers and cybercriminals:

124. We need to address disaster risk at an early stage.

125. Second-quarter GDP grew by 6%, a performance that exceeded even government agencies’ expectations. With this momentum, growth in 2026 is projected at between 4.8% and 5.3%. Although global uncertainty is expected to persist, Malaysia’s economic fundamentals remain strong. Therefore, GDP growth in 2027 is projected at between 4.2% and 5.2%.

126. Almost all businesses in Malaysia are micro, small and medium enterprises (MSMEs). They contribute 40% to the economy and employ eight million people, or half of the country's workforce.

127. Recognising the burden of rising operating costs on MSME entrepreneurs, the government has agreed to reduce the MSME income tax rate by one percentage point.

128. The government also proposes the following tax measures:

129. I have seen first-hand how equipment assistance helped a mother in Penang put her sewing skills to use. Sometimes, there are rakyat that have the skills but lack the capital to buy equipment such as sewing machines or ovens. Therefore, the government has agreed to allocate RM200 million under Sejahtera Madani grants to help 40,000 recipients, particularly women, acquire equipment and receive training.

130. Microfinancing is another tool to support small entrepreneurs earn more from their businesses. Therefore, the government will increase microfinancing to RM6.6 billion in 2027.

131. Banks have begun offering basic credit cards at reduced interest rates capped at 14% per annum. My appreciation to Alliance Bank Malaysia Bhd (KL:ABMB), Malayan Banking Bhd (KL:MAYBANK) and CIMB Group Holdings Bhd (KL:CIMB) for making this facility available. Therefore, I welcome more banks to follow suit.

132. Bank Negara Malaysia will provide RM5 billion in financing to support SMEs affected by the West Asia conflict. Given the very encouraging take-up, BNM has agreed to add another RM5 billion to the financing facility.

133. BPMB Group will allocate RM7 billion across seven strategic sectors to support growth in high-impact industries and core sectors of national development, including renewable energy, logistics, aerospace and semiconductors.

134. Next year, SJPP and CGC will provide financing guarantees of up to RM32 billion. SJPP will also extend its coverage to mid-tier companies across all sectors, with the guarantee limit raised to RM50 million. A total of RM1 billion guarantees by SJPP will be earmarked to support the expansion of local companies through mergers and acquisitions.

135. This means that the total value of loan facilities and financing guarantees will increase from RM50 billion to RM57 billion in 2027.

136. For the first eight months of 2026, Malaysia’s trade reached RM2.5 trillion, with exports surging 31.2% to RM1.36 trillion.

137. The government takes seriously the concerns of small traders over foreign e-commerce companies entering our market without proper oversight and enforcement. Therefore, the government are moving swiftly to examine legislative and enforcement measures to safeguard local MSMEs from unfair competition and ensure that products bought by the rakyat are safe.

138. The E-Commerce Bill will be tabled at the next Parliament sitting, as part of efforts to strengthen accountability among online platforms and sellers.

139. Approved investments in the first half of 2026 reached RM218.5 billion, up 11.7%. This puts us on track to set a new record high for the third consecutive year.

140. Government-linked investment companies are entrusted to build the resilience of the domestic economy and enhance the capabilities of local companies in high-value sectors. Therefore, GLICs through GEAR-uP will mobilise RM25 billion in domestic investment.

141. Start-ups need support at every stage, from ideas to seed capital and scaling up. Mid-tier companies, meanwhile, must rapidly become selfreliant to lead in high-value industries.

142. The Madani government's reforms have restored investor confidence. In just two years, Malaysia has leapt to the 15th place in the World Competitiveness Index. We also ranked first as a digital nomad destination in the Rumavi Global Relocation Index 2026.

143. We must continue making it easier to do business in Malaysia, so that global companies can operate here and bring in the best skilled talent.

First: The government will improve the tax incentives for global services hubs (GSHs) from Jan 1, 2027. Among the changes is a preferential tax rate of 5% on income from GSH activities for new companies.

Second: Existing DE Rantau Nomad Pass holders that reach the two-year limit will be allowed to continue staying and working remotely in Malaysia, subject to the prescribed eligibility criteria.

Third: From Jan 1, 2027, spouses of expatriates holding a Category I employment pass who themselves hold a dependant pass will be allowed to work in Malaysia, subject to the prescribed conditions. This will help Malaysia remain a destination of choice for top talent without their spouses having to give up their careers.

Fourth: We have introduced Malaysian Asean Business Entity (MyABE) status to support the expansion of Malaysian companies across Asean. The Securities Commission Malaysia, working with TalentCorp, will now facilitate the initial employment pass application process for listed MyABE companies, with a target of five working days.

Fifth: The reinvestment allowance is being reviewed, including examining the eligibility criteria and the mechanism for providing the incentive, to make it more targeted and strengthens industry competitiveness.

Sixth: The Securities Commission Malaysia and the Hong Kong securities regulator have formalised cooperation to facilitate Malaysian companies list their shares in both markets. Matching grants will be provided to cover listing costs.

144. To strengthen the domestic maritime industry, full income tax exemption for Malaysian shipping companies will be extended until the year of assessment 2036. Stamp duty on loans to purchase or build Malaysian ships will be fixed at RM2,000 for loans up to RM100 million or RM5,000 for loans of more than RM100 million.

145. National borders are becoming new gateways to prosperity — places to accelerate trade, attract investments and create high-value jobs for the youth.

146. In the south, the JS-SEZ brings together the strengths of Malaysia and Singapore. From 2025 to June 2026, RM132 billion in investment was recorded.

147. In the north, trade along the Bukit Kayu Hitam-–Sadao corridor reached RM27 billion in the first six months of the year. Therefore, the Delapan Special Border Economic Zone continues to be strengthened.

148. Malaysia and Indonesia have agreed to expedite the reopening of the Tebedu-Entikong trade route. Border roads between Sabah, Sarawak and Kalimantan will be upgraded to facilitate two-way movement.

149. PETRONAS’ decision to expand its investment in Phase Two of LNG Canada strengthens Malaysia’s role in the international LNG supply chain. The successful petroleum 73 discovery in Suriname and cooperation opening the way for potential development of the Galkynish field in Turkmenistan, one of the world’s largest natural gas fields.

150. In addition, PETRONAS’ transition to full ownership strengthens the Pengerang Integrated Complex as a strategic national asset. It will enable the optimisation of the value chain towards high-value products, while drawing on the technology and expertise of global partners, and position Pengerang as a strategic hub for fuel supply security, particularly amid uncertainty in global markets.

151. Alongside this, the Pengerang Biorefinery, developed in partnership with Enilive, Eni and Euglena energy company, will extend Pengerang’s role in producing low-carbon fuels, including sustainable aviation fuel, HVO and bio-naphtha.

152. PETRONAS and TNB's involvement in cross-border energy projects under the Asean Power Grid will not only strengthen energy security and open up new economic opportunities, but also provide a foundation for regional diplomacy, cooperation and connectivity.

153. Bakat Madani was launched through commitments from six GLICs, PETRONAS and a network of GLCs to provide training and quality employment opportunities for 25,000 young people. For 2027, the target will be 30,000 new job opportunities, including through private-sector participation.

154. To encourage greater private-sector participation, companies providing Bakat Madani training programmes will receive a tax deduction for the period from June 29, 2026 to Dec 31, 2030.

155. Total TVET allocations across ministries will amount to RM8 billion. The government's focus is to improve young people's skills and employability.

156. The government is also prioritising skills development for young people in the Indian community. Funding for Mitra will therefore increase to RM150 million, with priority given to providing training and jobs for Indian youths in fields including industrial automation, technology and aircraft maintenance.

157. Reaching for the skies, while anchored on our values also means leading in AI without compromising our values or national security. I have often stressed the need for young people to master the fields of the future, such as coding, data science and quantum technology.

158. Malaysia has successfully maintained nearly 18 million hectares of forest cover, representing 54.4% of the country's total land area. This is in line with Malaysia's commitment at the 1992 Earth Summit in Rio de Janeiro to maintain at least 50% of its land area under forest cover.

159. As of 2025, nearly 4,000 hectares of mangrove forests and coastal areas have been successfully rehabilitated through the planting of more than 9.3 million mangrove trees and other suitable species.

160. Peat swamp forest conservation and fire risk management have been strengthened through high-impact financing, strategic partnerships and advanced technologies.

161. Malaysia is among the world's 17 megadiverse countries, home to nearly 70% of the world's known species of flora and fauna. This includes 12,000 species, or more than 80%, found in Sabah and Sarawak.

162. To support state governments in conserving the nation's natural heritage, the Ecological Fiscal Transfer (EFT) Fund will be increased to RM270 million. This increase aims to promote community-based economic activities and ecotourism.

163. RM65 million will be allocated to support 2,500 community rangers, comprising Orang Asli, military veterans and retired police personnel, in safeguarding the nation's biodiversity. The allocation also covers the construction and maintenance of ranger posts to support patrol activities.

164. We welcome the return of leatherback turtles to nest along the Terengganu coast, following the last recorded nesting in 2017. To safeguard our marine heritage, a measure to buy back old fishing nets will be introduced to ensure that abandoned nets no longer endanger marine life. In addition, ageing public sewerage systems in Pulau Tuba, Langkawi, Redang and Tioman will be urgently upgraded.

165. A total of RM15 million from palm oil industry cess collections will be allocated for environmental conservation. Priority will be given to protecting the habitats of endangered species such as the Malayan tiger, Bornean elephant and orangutan.

166. The creative industry will continue to be strengthened to elevate the nation's image, create employment opportunities and bring Malaysian stories to the global stage. An allocation of more than RM130 million will be provided to support the local film, music and creative content sectors.

167. In the era of artificial intelligence, the Malay language must advance rapidly in tandem with technological progress. The government will mobilise the collective resources of ministries, agencies and educational institutions to contribute verified and annotated digital language data to Dewan Bahasa dan Pustaka. Developing a robust digital ecosystem is essential to enable Malaysia to build its own AI technologies rooted in national identity.

168. We celebrate the success of the Malaysian contingent at the AichiNagoya Asian Games, securing nine gold, seven silver and 16 bronze medals. To all athletes, coaches and officials: Congratulations and thank you for bringing honour to the nation.

169. Next year, Malaysia will once again welcome neighbouring countries as host of the 2027 Sea Games and Asean Para Games. These prestigious sporting events will provide an opportunity to enhance the nation's standing and foster unity among malaysians. therefore, an allocation of RM240 million will be provided for preparations to host the 2027 Sea Games and Asean Para Games.

170. In addition, RM460 million will be allocated for national sports development. This includes strengthening high-performance sports and the road to gold programme, supporting para-athletes and deaf sports programmes, as well as maintaining sports facilities nationwide.

171. The government will allocate RM30 million for the sports matching grant to encourage sports associations, clubs and NGOs to organise high-performance sporting events.

172. The allocation for school sports activities will also be increased by 50% to RM27 million, benefitting more than 4.6 million students across 10,000 schools nationwide.

173. I am often asked, what is Madani? As though it were something new. Yet, at the heart of Madani lies ihsan (compassion), a value deeply rooted in our society. We are all familiar with the story of Usop, popularly known for his Minyak Hitam Jalanan, whose heartwarming exchange of kindness with Dicky went viral. We also celebrate nurse Deena Nadzhiefa, who helped feed an Indian patient, and Zira, who provided free meals to hungry schoolchildren. This is the true spirit of Madani, where compassion transcends racial boundaries. It is therefore essential that these noble values be instilled in our children. Accordingly, the government will introduce the Budi Belia programme, under which youth who complete the required hours of volunteer service with selected non-governmental organisations (NGOs) will receive an e-wallet incentive of RM100.

174. In addition, the government will organise the unity league to revive traditional sports and folk games as a platform for fostering unity. The initiative aims to attract up to 200,000 participants at the community level, bringing Malaysians of different ethnic backgrounds together through sports and strengthening bonds.

175. The government has agreed to increase the annual Rukun Tetangga grant from RM6,000 to RM10,000 for each active, registered Rukun Tetangga area nationwide. This will enable more activities promoting unity, community engagement and national integration to be carried out at the community level of diverse ethnic and religious backgrounds.

176. The government has extended the Visit Malaysia Year campaign until next year. A total of RM935 million will be allocated for tourism and culture.

177. To boost tourism on the duty-free islands of Langkawi and Labuan, The duty-free purchase limit for visitors and tourists will be increased to RM10,000, subject to a minimum stay of 48 hours. More products made in Langkawi will also be exempted from import duty, thereby supporting local entrepreneurs.

178. On some resort islands, residents and tourists face difficulties in finding ATMs. Small businesses lose sales when customers do not have cash. Next year, QR payment facilities will be expanded to 15 locations, including resort islands.

179. Malaysia must become a preferred destination for major international events. Rebates will be provided to event organisers at venues with a capacity of at least 10,000 spectators. Tax incentives for incentive travel, international conferences and trade exhibitions will also be extended until the year of assessment 2030.

180. The Madani government remains committed to upholding Islamic teachings and values in Malaysia.

First: A special incentive of RM150 per month will be provided to 500 kafa teachers who teach students with special needs, including through sign language and the Braille Quran.

Second: The government, through Tabung Haji, will fully cover the socso contributions for all 40,000 imams, bilals, tok siak, noja, marbut and takmir teachers.

Third: The government has agreed to provide a special contribution of RM750 in appreciation of the services of 70,000 kafa teachers, takmir teachers, imams, bilals, tok siak, noja and marbut.

Tan Sri Speaker Sir,

181. An eminent monk who lived during the Tang Dynasty (AD 618-907) expressed a profound metaphor rich in wisdom in the poem Shangtang Kaishi Song (上堂開示頌):

不经一番寒彻骨，怎得梅花扑鼻香。

Bù jīng yī fān hán chè gǔ, zěn dé méi huā pū bí xiāng.

“How can the plum blossom release its fragrance without first enduring the bitter cold that penetrates to the bone?”

182. This metaphor reflects a fundamental truth about life and the human struggle, great achievements do not come from prolonged comfort, but require perseverance, patience and the willingness to endure hardship.

183. Therefore, the budget is not merely about calculating revenue and allocating funds. It is a test of the trust placed in us — whether power is kept in check, laws are upheld and public funds are managed with integrity. An economy cannot stand strong on weak institutions.

184. The most difficult reforms are those that limit our own powers. This year, the proposal to limit the prime minister’s term of office was brought before Parliament but has yet to secure a two-thirds majority. The proposal to separate the roles of the attorney general and the public prosecutor has also been examined in depth. We respect the parliamentary process, but our resolve to pursue these reforms will never waver.

185. As the administration enters its fifth year, the Madani reform agenda continues to be strengthened without fear:

186. The Fifth Madani Budget continues an expansionary fiscal policy, leveraging the nation’s full resources, amounting to RM510 billion, compared with RM470 billion. The breakdown is as follows:

187. Federal revenue this year is projected to be higher at RM363.6 billion, compared with the original estimate of RM343.1 billion. Next year, revenue is expected to rise further to RM380.8 billion.

188. The crisis in West Asia has increased fuel subsidies to RM40 billion. The fiscal deficit for 2026 is now projected at 3.6%, compared with the original target of 3.5%.

189. Nevertheless, the rate remains on a downward trajectory, from 5.5% in 2022 and 3.7% last year. Insya-Allah, the deficit will decline further to 3.3% in 2027, towards the target of 3% by 2028.

190. The reduction in the deficit and the controlled level of new borrowings have enabled federal government debt as a percentage of GDP to decline consistently, from 65.2% in 2025 to 64.0% in 2026, and is projected to decline further to 63.7% in 2027.

Tan Sri Speaker Sir,

191. Sincere appreciation is extended to the 1.6 million civil servants for their dedication and commitment in serving the nation. They are the driving force behind the Madani aspiration to elevate our nation’s dignity, standing and stature to greater heights. It is pleased to announce that:

First: The allocation for the construction and maintenance of quarters, including for police officers, doctors, military personnel, teachers and firefighters, will be increased to RM2.3 billion.

The Property Management Division will be upgraded to the National Property Department to strengthen the management of civil servants’ housing.

Second: Family housing for the Armed Forces will be built in Skudai, Johor, along with new quarters at Depot Tahanan Imigresen Langkap, Perak, and Papar, Sabah. These will benefit nearly 900 personnel at a cost of more than RM500 million.

Third: Allowances for Rela personnel, auxiliary firefighters, police volunteers and civil defence volunteers will be increased to RM9 per hour for volunteers and RM10.80 per hour for supervisors, with an allocation of RM339 million, benefitting nearly 50,000 volunteers.

Fourth: The one-off Ex-Gratia Waris Pukal benefit will be increased from RM20,000 to a maximum of RM50,000, subject to the length of service. This is in addition to the Ex-Gratia Waris Bulanan benefit for cases of death resulting from work-related accidents, and will take effect retrospectively from Jan 1, 2026.

Fifth: In recognition of outstanding officers awaiting promotion due to limited posts, the government has agreed to implement one-off 94 promotions on a Khas Untuk Penyandang basis for 12,000 P&P officers.

Sixth: The government has agreed to increase the total maternity leave entitlement throughout the period of service from 360 days to 490 days. This means that maternity leave will be increased to a maximum of 98 days for each childbirth. RM20 million will be allocated to upgrade childcare centres at government facilities.

Seventh: The minimum pension will be increased from RM1,000 to RM1,350 a month. This will benefit nearly 59,000 pensioners, ATM veterans and recipients of derivative pensions.

192. In recognition of the contributions of civil servants, the government has agreed to provide special financial assistance of RM1,500 to 1.3 million civil servants at Premier Grade B and below, including contract appointees.

193. Special financial assistance of RM750 will also be provided to more than one million government retirees, including pensionable and non-pensionable veterans.

194. This special financial assistance will be disbursed in two payments, before Aidilfitri and ahead of the 70th anniversary of Malaysia's independence.

Tan Sri Speaker Sir,

195. Having laid out the figures, detailed every foundation and priority, and set out each of our endeavours, we must return at last to the question at the root of it all: where will all of this take us?

196. In The Odyssey, the ancient Greek poet Homer tells of Odysseus, commander and veteran of the Trojan War, who braved seas and storms, temptation and turmoil, yet never lost the one thing that mattered most: his pure and unwavering memory of Ithaca. That is where a journey finds its meaning. Not in how far one wanders, but in the resolve never to lose one’s way, nor one’s reason for travelling.

197. So it is with nations, and the lives lived within them. We may walk many roads, forge many triumphs, raise grand towers and gleaming landmarks, master new technologies and open new frontiers. But in the end, every nation must know its Ithaca: the ambition it seeks, the values and roots it will defend, and the legacy it means to leave.

198. This budget, then, is not the destination. It is one more step towards Ithaca. We began today with the call of lighad — that every soul look to what it has prepared for tomorrow. And so we end where we began. Our responsibility is measured not by what we have spent, but by what we have prepared for those who will live tomorrow. We do not build a nation for a single fiscal year. We build it for a generation. And the task of a generation is not merely to enjoy what it has inherited, but to enlarge what it will bequeath.

Tan Sri Speaker Sir,

199. This is where our national covenant finds its meaning. It is a solemn pledge that the nation will never lose its love for its people; that power will always be fenced in by trust; that the nation’s wealth will return to the common good; and that every generation bears the duty to hand on a better Malaysia. This is what we mean by intergenerational responsibility.

200. This covenant also reminds us that building a nation is not the work of the government alone. It is a shared endeavour. The government shoulders the trust; the rakyat pour in their effort. The nation opens the room; society fills it with knowledge, creativity and courage.

Wassalamualaikum Warahmatullahi Wabarakatuh.

Tan Sri Speaker Sir, I beg to move.

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