Federal Government Funding Reforms: Issues and Challenges Facing Malaysian Public Universities

The purpose of this paper is to explore the shift in funding reforms currently facing at Malaysian public universities focusing on issues and challenges experienced by the Focused Universities in particular. Previous research has shown that shifts in funding mechanisms to public universities are more likely to result in behavioural changes at such institutions. Under the National Higher Education Strategic Plan beyond 2020, the Federal Government has launched a strategic plan of government objectives for public universities in order for them to become more dynamic, competitive and productive. Public universities must follow these plans through closely coordinated actions aimed to achieve specific strategic outcomes in teaching and research. It is the most comprehensive plan launched to date, and intends to transform the Malaysian higher education system. It aims to help these institutions achieve world class standards and make Malaysia a hub for higher education in Southeast Asia. Indeed, the government has also introduced a system of categorisations of the Malaysian public universities including research university, comprehensive university, and focused university. These categories determine the area and level of fund allocation according to specialisation of the university and the extent of its operations. Moreover, this paper will discuss the strategies needed for the focused universities in order to enhance educational research and teaching to align with the Federal Government objectives.