By: Retave’s TVET Desk Editor
Ask any TVET institution in Malaysia how it gets its budget, and the honest answer, according to the government’s own policy document, is roughly this: based on what you spent and how many students you enrolled last year, regardless of how well your programmes actually performed. Clarifying this highlights the systemic issues affecting funding allocation and institutional performance, helping policymakers understand the root causes.
How TVET gets paid today
The policy lays out the mechanics plainly. TVET funding in Malaysia for institutions runs through a centralised budget process, weighed down by bureaucracy, with no standardised fee structure across institutions and near-total dependence on government allocations. Recognizing these systemic flaws can inspire policymakers to take ownership of necessary reforms, as current funding formulas reward stability over performance.
That’s a structural flaw in the truest sense: not a shortfall you fix with a bigger cheque, but a design that needs rebuilding.
Three strategies to rebuild the ‘Plumbing’ of funds
The policy’s funding thrust sets out three strategies to make TVET funding sustainable and based on performance.
It calls for broad stakeholder engagement to carry them through.
1. Build a genuinely sustainable funding model.
This means broadening what qualifies for funding to include related TVET programmes, standardising fee rates across institutions, improving the collection of loan repayments, and opening the door to financing from foundations, NGOs, and banks, not just the Treasury.
2. Tie government funding to performance, not history.
Institutions would be funded based on ratings from the Single TVET Rating System, alongside a full policy review of how funding decisions get made in the first place.
3. Give institutions room to fund themselves.
This covers diversifying income through short courses, matching grants, and industry financing; improving the handling of equipment donations; and, perhaps most significantly, granting TVET institutions the autonomy to generate their own revenue.
Read together, the shift is from a system that pays institutions to exist toward one that pays them to perform. Under the new approach, institutions earn more of their own income and are rewarded for quality.
Beyond the balance sheet
Funding might sound like the least glamorous of the policy’s five thrusts, but it’s arguably load-bearing for the other four. Better teaching quality, stronger industry partnerships, a rebranded national image; none of that survives on a funding model that can be cut whenever government tax revenue dips, or when one institution gets more students to join than another. The policy’s own outcome statement for this thrust is direct: a comprehensive financing framework should guarantee continuous access to quality TVET programmes, and new revenue streams should be able to cover the cost of running TVET without institutions having to compromise quality to stay afloat.
The work ahead
Each of the three strategies is a substantial piece of work. Standardising fees across 1,345 public, private and state-run institutions means agreeing anew how money flows among many stakeholders, and giving institutions the autonomy to generate revenue means new rules for how they run.
Further Reading
- TVET in Malaysia: A Primer on the 2030 National Policy
- Inside National TVET Policy 2030 (Dasar TVET Negara 2030’s Fault Lines): Accreditation, Coordination, and the System It’s Trying to Fix
- TVET gets RM8 billion and three million training places in Budget 2027
References
Sekretariat Majlis TVET Negara. (2024). Dasar TVET Negara 2030. Jabatan Perdana Menteri Malaysia.
Jabatan Penerangan Malaysia. (2024). Dasar TVET Negara 2030 Adalah Bersifat Menyeluruh Dan Akan Menjadi Sumber Rujukan Dalam Setiap Inisiatif Serta Pelaksanaan Oleh Penyedia TVET Awam Dan Swasta Serta 12 Kementerian Berkaitan TVET. Available via the Jabatan Penerangan Platform.
Kementerian Pendidikan Tinggi (KPT). (2024). Pelancaran Dasar TVET Negara 2030, Selaras Dasar Dan Akta Sedia Ada Perkasa Bidang TVET Kebangsaan. Available at the MoHE Official Hub. https://www.mohe.gov.my/en/broadcast/activities/pelancaran-dasar-tvet-negara-2030-selaras-dasar-dan-akta-sedia-ada-perkasa-bidang-tvet-kebangsaan
