Only after reading through the whole budget speech that Malaysian Defence found it. You can also find it in line 126 of Pak Lah budget speech.

“126. For Development Expenditure, the largest allocation of RM20.6 billion is for the economic sector comprising agriculture, industry and infrastructure sectors. A sum of RM15.6 billion is allocated to the social sector encompassing education, health and housing. The security sector is given RM7 billion, while administration is provided with RM2.9 billion and for Contingencies, RM2 billion.”

As Pak Lah had also mentioned that the Police will receive RM6 billion (US$1.8 billion),we can assume that the Defence Ministry will get RM1 billion (around US$340 million) budget this year, which is about the same amount last year (Of course, I could be wrong here so if you have a better reading of the budget, please do so in the comments section)

In the past when Malaysian Defence asked how the annual budget allocation is used, informed sources said that the Defence Ministry allocation is by tradition meant, solely for the Armed Forces operations for the fiscal year with the contingency funds used in case of emergencies and other operational needs (such as new peacekeeping operations, which will be reimbursed by UN).

Funds allocated for administration will be used for that purpose, of course. Procurement of new assets and building of new facilities and such are funded by the Ninth Malaysian Plan.

Is this a good way to finance our defence? Malaysian Defence doesnt think so. A five year plan for vocational training maybe a good idea but like conducting a good war, an adaptable but decisive funding plan is clearly needed for our defence needs.

An annual budget, with allocations for administration, procurement, operations and contingencies, not only be more transparent but would also forced budget discipline on our armed forces. But wait, didnt I said that before?

–Malaysian Defence