PUTRAJAYA, Oct 15 — Budget 2026 was formulated based on current economic realities rather than pure economic theory, in line with the government’s commitment to ensuring prudent fiscal management that prioritises the people’s well-being, said Prime Minister Datuk Seri Anwar Ibrahim.
Anwar, who is also finance minister, said the current approach cannot be compared with the 1990s era, when the Malaysian economy recorded rapid growth of between 10 and 11 per cent with a low deficit.
“The budget framework must reflect the real economic situation we face. Sometimes, if we only take the views of academicians or theoreticians, they give us general frameworks, but we must consider debt levels, the deficit and revenue before we can achieve balance.
“It’s different from the 1990s. Naturally, the approach must also differ. We inherited swelling debts and a high deficit, so all these factors must be carefully assessed before designing a suitable budget framework that meets current needs,” he said at the Finance Ministry monthly assembly here today.
Anwar said that since he took office, the government’s focus has been to strengthen governance and administrative integrity, as issues of leakages and corruption have long been systemic.
Anwar said stronger enforcement and governance by agencies such as the Inland Revenue Board (LHDN), Royal Malaysian Customs Department, Malaysian Anti-Corruption Commission (MACC) and Royal Malaysia Police (PDRM) have allowed the government to recover RM15.5 billion over the past two years.
He said the amount was collected through asset seizures, the recovery of outstanding taxes, and efforts to curb smuggling of cigarettes and liquor as well as online fraud syndicates.
“This is not from new taxes, but from clean and firm governance and enforcement. If revenue has increased because we stopped leakages and corruption, there’s no reason to burden the people with additional taxes,” he said.
Anwar said the government’s fiscal policy is focused on striking a balance between reducing the national deficit and debt while safeguarding the welfare of the people.
“We managed to reduce the deficit from 5.6 to 3.8 per cent. That’s a significant step, but if we move too drastically, it might look good in economic theory but would hurt the people, so balance is crucial,” he said.
In his speech, the prime minister expressed appreciation to Finance Ministry staff for their exceptional commitment in preparing Budget 2026, calling it the result of their dedication, sincerity and hard work.
“I’ve probably presented nearly 10 budgets since 1991, and I’ve learned a lot along the way, but what impresses me most, and what many may not realise, is the sheer dedication of the ministry staff who work tirelessly, often late into the night, treating this not just as a job but as a mission carried out with commitment and sincerity.
“In the weeks leading up to the budget (tabling), the entire Treasury family demonstrated extraordinary dedication. Once again, I extend my heartfelt thanks and appreciation to everyone at the Finance Ministry,” Anwar said.
