KUALA LUMPUR (Oct 9): Budget 2027 has fallen short of addressing Malaysia’s healthcare workforce crisis, underinvestment in public hospitals and gaps in preventive healthcare, the Galen Centre for Health and Social Policy said on Friday.
While welcoming the government’s plan to offer permanent positions to more than 9,000 contract doctors in 2027, Galen Centre said the move would not necessarily increase the number of healthcare professionals available to treat patients.
Its chief executive officer Azrul Mohd Khalib in a statement questioned whether the positions could be filled, noting that only about 500 medical graduates had applied for 5,000 trainee doctor positions earlier this year. The increase in monthly post-basic incentives for 47,000 nurses and paramedics from RM100 to RM200 would also do little to resolve wider workforce shortages, he said.
“What is missing is a credible, funded, multi-year recruitment and retention programme. Malaysia needs to recruit aggressively, retain experienced personnel, improve working conditions and compete for skilled healthcare talent from both domestic and regional sources,” said Azrul.
He also criticised the government’s failure to commit to establishing an independent Health Services Commission, which he said was essential to reforming recruitment, deployment, remuneration, staff welfare and career progression.
On the MediAsas health insurance plan — scheduled for launch in January 2027 — Galen Centre opposed allowing Malaysians below 55 to use their Employees Provident Fund’s Sejahtera account savings to pay premiums, warning that this could compromise their retirement security.
The proposed RM200 first-year premium subsidy for eligible small and medium enterprise employees may encourage initial take-up, but does not address affordability once the subsidy expires or guarantee adequate protection against exclusions, rising premiums, co-payments and high out-of-pocket costs, Azrul said.
In addition, he questioned whether Budget 2027 did enough to prepare Malaysia for an ageing population, despite measures to reduce the service tax on aged-care services from 8% to 6% and exempt annual care fees of up to RM96,000 from the tax.
While the measures may provide some relief to families, Azrul said they did little for lower-income households unable to afford formal care.
“Malaysia is approaching an aged-care crisis for which we are financially, institutionally and socially unprepared,” he said, highlighting the burden on family caregivers, particularly women, who often sacrifice employment and income to provide unpaid care.
He went on to call for a national aged and long-term care framework covering home-based care, community nursing, rehabilitation, respite services, residential care and palliative care, supported by sustainable financing such as a national health and social insurance scheme.
Healthcare allocation rises, but development spending stagnates
Azrul noted that the Health Ministry’s allocation for 2027 rose to RM47.7 billion from RM46.52 billion in 2026, an increase of RM1.18 billion or 2.5%, marking the smallest increase in five years.
More concerning, development expenditure is virtually unchanged at RM6.75 billion, up by just RM5 million from 2026.
“The government cannot expect to modernise the healthcare system, expand capacity and address decades of underinvestment while keeping development expenditure effectively stagnant. This is not the investment trajectory of a country preparing for a rapidly ageing population and increasing chronic disease burden,” said Azrul.
He added that infrastructure investment must be accompanied by sufficient funding for staffing, operations, medicines and maintenance.
“New buildings and sophisticated equipment are of little use when there are insufficient trained personnel to operate them,” he said, adding that some newly opened hospitals, including Pasir Gudang Hospital, remained unable to operate fully because of staff shortages.
No fresh push on tobacco taxes, sugar subsidies
Azrul also criticised the absence of a further increase in cigarette excise duties, saying the government had missed an opportunity to curb smoking, reduce tobacco-related diseases and raise revenue.
Galen Centre proposed increasing cigarette duties from 42 sen to 65 sen per stick in 2027, followed by annual increases to 95 sen by 2031. It estimated that the proposed hikes could generate more than RM2 billion in additional revenue by 2031.
The lack of a commitment to remove sugar subsidies, estimated by the centre at RM400 million to RM500 million annually, was another concern.
“The government has missed an opportunity to discourage smoking, prevent initiation among young people, reduce long-term healthcare expenditure and strengthen public revenue,” Azrul said.
“It makes absolutely no sense for the government to spend public money keeping sugar affordable while simultaneously spending billions treating diabetes, obesity, kidney failure and cardiovascular diseases.”
He added that fiscal policies should reinforce, rather than undermine, the government’s public health objectives.