2026 Budget signals shift to needs-based assistance, but clear communication key to public trust

SHAH ALAM – The 2026 Budget has been met with cautious optimism among economists, who view it as a step towards a more inclusive and needs-based fiscal framework.

The absence of race-specific allocations, they said, suggested the government’s focus was shifting towards fairness, equity and long-term social cohesion, although transparent communication will be essential to prevent misinterpretation.

The move marked a departure from previous budgets that featured targeted allocations for Chinese and Indian communities.

Instead, the 2026 Budget tabled by Finance Minister Datuk Seri Anwar Ibrahim last Friday, emphasised equal access to support across income levels, consistent with the Madani framework of shared prosperity.

Universiti Teknologi Mara Malaysian Academy of SME and Entrepreneurship Development coordinator of the Student Entrepreneurship Centre Dr Mohamad Idham Md Razak said the omission of race-based provisions should not be viewed negatively, as it represented an evolution in Malaysia’s policymaking approach.

He said rather than segmenting allocations along racial lines, the focus now appeared to be on uplifting all Malaysians through equitable and needs-based assistance.

“This direction reflects a maturing policy mindset that prioritises unity, shared prosperity and fairness,” he said when contacted.

This approach, he said, could foster stronger public confidence if accompanied by transparent explanations on how allocations were determined.

The 2026 Budget, Idham said, also demonstrated a careful balance between economic prudence and social empowerment.

The emphasis on education, consumer protection and governance reforms reflected a commitment to structural change that strengthened national resilience and competitiveness.

Economists generally described the budget as “technically strong” and “structurally sound”, but some expressed concern that broad-based policies might inadvertently create a perception gap if not effectively explained to the public.

Malaysia University of Science and Technology economist Professor Emeritus Dr Barjoyai Bardai pointed out that while allocations such as the Rahmah Cash Aid (STR), Rahmah Basic Necessities Aid (Sara) and festive toll discounts benefitted a wide range of Malaysians, the lack of explicit mention of Chinese and Indian community programmes could lead to confusion or feelings of exclusion.

“This could fuel perceptions of exclusion, especially if Bumiputera-focused education and entrepreneurship funds dominate headlines.

“However, the government may argue that needs-based targeting transcends race, aligning with Madani principles of equity and inclusivity,” he said.

Meanwhile, economist Dr Geoffrey Williams described the budget as strong in design but modest in direct relief for households.

He said the standouts were that this was technically very strong with a lower overall budget

He added that although there was no mention of new allocations for Chinese or Indian communities, funding levels were expected to remain consistent with previous years.

On Friday, the Finance Ministry officially tabled the 2026 Budget, marking the fourth budget under the Madani administration and the first under the 13th Malaysia Plan (2026–2030).