Consider This: Inside Budget 2026 (Part 2) — Key Takeaways and Tough Trade-offs - Video Dailymotion

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Budget 2026 sets the stage for Malaysia’s next year of economic priorities: a roadmap the Government says will balance growth and the social protection and wellbeing of the Rakyat. But how realistic was that balance? On this episode of #ConsiderThis Melisa Idris speaks with Aira Azhari, Chief Executive Officer of the think tank, IDEAS Malaysia.

Transcript

00:00Hi, welcome back to Consider This. I'm Melissa Idris.

00:12If you've just joined us, we're discussing Budget 2026,

00:15which of course was tabled in Deorayat earlier today.

00:18Joining me on the line now is Aira Azhari,

00:20who is the Chief Executive Officer of the Think Tank Ideas Malaysia.

00:24Aira, thank you again for joining me on a Friday evening.

00:28I know lots of people have had a very long day of watching the budget tabling

00:33and digesting some of the allocations that have come out.

00:36But what were your initial reactions to the budget?

00:40Can I ask you what it reflects to you about the Madani government's

00:44economic priorities for the coming year?

00:48Yeah, I think it's quite interesting that the allocation,

00:52well, the budget this year is less than the last tabled budget.

00:58by RM1.8 billion.

01:01I think it's been a while since we've seen a reduction.

01:05I think the last time was during COVID, the COVID years.

01:09So, yeah, it's quite interesting to see a leaner budget.

01:14But I think a leaner budget is good in some ways.

01:21But I think what maybe was missing a bit was, you know,

01:27fiscal policies that can adapt to the changing economic environment,

01:31as we all know what's going on globally,

01:34and also the more long-term structural imperatives that our economy needs.

01:40Yeah, so, you know, with all the uncertainty that's grappling

01:45in the global markets, yeah, I think in a way,

01:49the fiscal consolidation is quite interesting and quite welcome.

01:53But, of course, the devil is in the detail.

01:57And, yeah, we all know that Malaysia has a pretty limited fiscal space.

02:05And I think the other element that has been well noted throughout the day was,

02:13again, Petrona's dividends have been halved.

02:16And, you know, there are many factors to this.

02:21But I think, you know, global oil prices are definitely the main concern there.

02:26So I think for ideas, the concern remains how we are looking at revenue sources, right?

02:35Because obviously there are a lot of demands and spending that the government needs to do.

02:40But it's still quite unclear on how our revenue sources are going to be expanded.

02:47Yeah.

02:48So I think that's one of the main concerns that we've had in the budget so far.

02:53Yeah.

02:54Well, everyone wants a piece of the pie of budget every year.

02:58And it looks like this year, Sabah and Sarawak have received the highest allocation under budget 2026.

03:05Do you see this as essentially a closing of the development gap which has been put forth by MA63?

03:15So do you see this as a championing of MA63?

03:18Or are you more, do you think of this as more politically timed ahead of the Sabah state polls?

03:27Yeah, so, well, I think firstly, we need to remember that this budget is for 2026.

03:36And the Sabah state election is, of course, coming in probably the next one or two months or so.

03:42But I understand your point.

03:45However, I think, you know, the pattern of increasing development allocation to Sabah and Sarawak

03:50has been going on for the last few years, I believe since 2022, the allocations have increased.

03:59So I don't really see like such a dramatic increase this time that might hint to, you know,

04:06this being some sort of a pre-election budget or sort of some extraordinary commitment to MA63.

04:16I think the increase has been quite steady and in keeping, I think, with the development needs of the two states,

04:25which are two very large states, of course.

04:28Yeah, so I don't see an extraordinary pattern there.

04:33Yeah, and but, you know, of course, you cannot deny that Sarawak, of course, you know,

04:40over the last few years have been more assertive with their own development, you know,

04:48the initiatives they've taken.

04:50So, of course, you know, not denying that.

04:54But no, I do not see an extraordinary pattern or some dramatic increase in this year's budget.

05:00Yeah.

05:01Well, did you see in this budget sufficient allocations for strengthening good governance?

05:08Now, I'm wondering because the Madani government has long been priming the ground for more difficult structural reforms,

05:16for, you know, subsidy rationalisation and the like.

05:19Is there anything in Budget 2026 that suggests that this reform momentum is still alive?

05:24Or are you seeing there be some, it being tempered a little bit by political caution?

05:32Well, there is an increased funding for parliament from 200 million to 220 million ringgit.

05:41Of course, that's always welcome.

05:44You know, parliament's role, as we know, has always need even more strengthening as, you know,

05:51an oversight body to the executive and 5 million ringgit allocated to the select committees

05:57is also a welcome move because we know that our PSSCs do need more resources,

06:04need more staffing in order to carry out their jobs properly.

06:12But I don't really see anything beyond that that stands out very much.

06:17Of course, things like the Political Financing Act is still, you know, in sort of consultation phase

06:27in the different states that's currently being done by Bahiyu.

06:32So, I didn't expect to see much in there.

06:37So, yeah, the increase in parliamentary allocations, as in allocation for parliament,

06:43is a welcome move.

06:45And, I mean, hopefully this will be translated quite quickly next year

06:50in empowering our parliamentary select committees even further.

06:55And, you know, hopefully it will mean that there will also be more public participation,

07:02you know, hearings that are open to the public, open to civil society,

07:07because this is really important.

07:09We can't have these committees operating behind closed doors.

07:13But, yeah, not so much beyond that.

07:16So, I don't know if that means, you know, it probably doesn't necessarily mean

07:21that the government doesn't care about institutional reforms,

07:23but maybe they're just taking a little bit more time than expected.

07:29Was there anything that was noticeably missing then from this budget

07:33that you really wanted to see in it from a governance and a civil society standpoint?

07:38I wouldn't say that from the governance and civil society standpoint,

07:48but what we've observed at Ideas was there doesn't seem to be much that stands out

07:53in terms of social spending, education and healthcare as well.

07:57Of course, Jen, the allocation for the ministries will always increase every year.

08:01But I think it would have been good to see something more specific and more targeted.

08:09Yeah.

08:09So, I think in terms of social spending, it seems to be quite thin, I suppose, this year.

08:16So, that I think was a bit, I guess, you know, a bit of a concern for us observing.

08:24Yeah.

08:25Yeah.

08:26So, I may ask you to put your political analyst hat on from a Rakyat perspective.

08:33Do you think the public will perceive this budget as responsive to some of the everyday concerns?

08:41We know bread and butter issues will always be at the top of the list of electoral concerns for the public.

08:51So, do you think that this went far enough to address some of the cost of living concerns that we all face every day?

08:58Yeah, I mean, of course, you know, there has been, there was like 15 billion ringgit allocated for some of the cash hand-out programs

09:10like Sumangan Tunai Rahmah and the Scheme Asas Rahmah programs.

09:15So, you know, those schemes are there.

09:18Of course, you know, there is a question of what is the sort of more long-term thinking about cost of living and bread and butter issues.

09:27The other thing I wanted to point out was in his speech, I think the finance minister did say something like,

09:34you know, subsidies is a right and privilege of Malaysians, which I don't think sends the right message.

09:42You know, firstly, subsidies, I mean, terming subsidies as a right and a privilege,

09:48yeah, I don't think that sends the right message because as we know, you know, subsidies distort the market

09:54and also they cost the government a lot of money that arguably can be used for many other things that the people need.

10:02So I think this kind of language, I'm sure is intentional on the finance minister's part,

10:10but I'm a bit concerned on what kind of message this sends to the public.

10:16So, again, I think in terms of the sort of short-term relief that the Malaysian people need,

10:25I think it's kind of pretty standard and they're there.

10:28But as, you know, as we said, the more long-term thinking about this, you know,

10:34about how do we raise wages and, you know, make living affordable for all Malaysians,

10:42the discussion about taxes. So that's, I think, something that was quite thin as well.

10:49You know, the increase in tax revenue is, you know, because we're collecting taxes better,

10:54not because, you know, we are having comprehensive tax reform across the board.

11:00So, yeah, so I think in a sort of short-term sense, yes,

11:05but I don't think we're doing enough long-term thinking at all.

11:09Ira, thank you so much for joining me on the show today and for getting the memo to wear pink on the show.

11:16I appreciate you and your time. Thank you.

11:18That's all the time we have for you on this episode of Consider This.

11:22I'm Melissa Idris signing off for the evening.

11:25Thanks so much for watching. Good night.

Consider This: Inside Budget 2026 (Part 2) — Key Takeaways and Tough Trade-offs

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