Sabah mindful of Putrajaya’s tight budget, but insists on 40pc dues in time

KOTA KINABALU, Nov 30 ― Sabah understands the financial limitations faced by the federal government but insists that the latter pays its dues to the state in full eventually when the economy improves.

Chief Minister Datuk Seri Shafie Apdal said the 40 per cent of revenue from the state must be returned back as enshrined in the Malaysia Agreement in 1963, but said they can negotiate the terms of payment.

“We are mindful of the current economic hardship being faced by the federal government. Because of this, we hope that things will be more forthcoming in the not so distant future, when the environment is much better.

“The 40 per cent is a must, its stipulated in the agreement, but can be staggered, because we understand what they are going through ― but we also have debts to pay, its not just them,” he said.

Shafie said that there has been progress in getting the back the 40 per cent entitlement compared to the previous government, and that he would bring in up in meetings with the Prime Minister when they review the Malaysian Agreement.

“We have to approach this tactfully. There is no point pressuring them to pay when they are facing problems now. We are in dire need of money, I am aware of that ― there are businesses closing in Sandakan and Tawau ― but we have to manage this properly.

“I met up with top leaders recently, things are coming up I believe ― announcements been made by the Prime Minister and the Finance minister, they realise our entitlement and said they have to delay the payment so they are mindful also ― just don’t delay too long,” he said.

Under the Federal Constitution, Sabah is entitled to 40 per cent of net revenue derived from Sabah under the 10th Schedule, Article 112 Part IV Special Grants to States of Sabah and Sarawak.

However, instead of giving the 40 per cent entitlement, the federal government had given only RM26.7 million to Sabah government annually, an amount which was agreed upon in 1969, but has since not been adhered to.

It was never revised after 1973 even though Article 112D of the Federal Constitution provides for mandatory reviews every five years.

Finance minister Lim Guan Eng recently said that Putrajaya wanted to give Sabah its 40 per cent net revenue but does not have the funds for now.

He also said a special committee set up by the federal government was looking at matters relating to revenue and MA63.