KUALA LUMPUR, Oct 30 — The formula for Sabah and Sarawak’s special grant has yet to be finalised, Minister in the Prime Minister’s Department in charge of Sabah, Sarawak and Special Functions has said.
Datuk Armizan Mohd Ali said this would be subject to discussions between the state governments of Sabah and Sarawak and the Ministry of Finance (MoF).
“Since there is no specific formula yet, the agreement at this time is an interim one.
“The government at all three levels (federal government, Sabah government and Sarawak government) is in principle to ensure that Sabah and Sarawak receive a higher revised rate than now.
“Hence, the agreement is an interim one. As mentioned by the prime minister in his Budget 2024 speech, the RM300 million rate is an interim arrangement involving the three states.
“When and what formula is decided upon depends on the discussions between the governments of Sabah and Sarawak and the Finance Ministry, which is responsible for this matter,” Armizan told Parliament today during the winding-up of the debate for the Supply Bill 2024 by his ministry.
He was responding to an interjection by PAS’ Kubang Kerian MP Datuk Seri Tuan Ibrahim Tuan Man who wanted to know whether a fixed formula or a special grant rate for Sabah and Sarawak would made on an interim basis.
Armizan explained further that the Finance Ministry will furnish a detailed meaning of ‘interim’, as specified in the special grant, soon.
“I am confident that the MoF is in the process of following the proper procedure and we hope that this gazette order can be presented during this Parliament session.
“Likewise, as for the word ‘interim’, it will also be clarified by the MoF,” he said.
He also informed the House that negotiations for the special grant will take into consideration the needs of the state government and the ability of the federal government to see the deal through.
“Although the federal government’s ability is mentioned, the most important thing is that the federal government recognises the rights of Sabah in the Federal Constitution which is enshrined in Article 112C,” he said.
Article 112C of the Federal Constitution stipulates that the Federation of Malaysia shall make a special annual grant to the states of Sarawak and Sabah and the two Borneo States shall receive all proceeds from the taxes, fees and dues collected, levied or raised within the States.
It was reported that the Cabinet previously increased the amount of Sabah’s new special grant by 4.7 times from RM26.7 million (since 1973) to RM125.6 million for 2022, and the amount will increase every year from 2023 to 2026, according to a mutually agreed rate.
The last review of special grants to Sarawak and Sabah was made in 1969 and 2022 respectively.
