PM Najib had agreed to set up a Special Committee to look into the entitlement of the 40% net revenue derived from Sabah and himself promised that it will be honoured if it is in the Federal Constitution during the presentation of the Memorandum on Sabah’s 40% net revenue in July 2015.
There is no dispute that the 40% net revenue is Sabah’s legal entitlement under the Tenth Schedule of the Federal Constitution. It was in fact paid for 1969 to 1973 with the last payment on 1st January 1974 (for 1973) in the sum of RM26.7 million, a progressive increase of 7.5% annually from 1969’s RM20.0 million.
Based on the same 7.5% formula without even working on a higher figure that Sabah is entitled, Sabah’s entitlement would be RM598.52 million for 2016 and the accumulated arrears as at 31st December 2015 without any interest would be RM7,597.5 million. That’s a cool RM8.2 billion, give and take a few million.
If the arrears is added interest compounded at 5% which is the rate fixed by the Courts, the arrears and interest would be a staggering RM16.965 billion.
However, this RM16.965 billion is small change compared to the actual 40% net revenue if it is calculated based on the actual revenue derived from Sabah as provided in the 10th Schedule.
Based on figures disclosed to the public, the federal tax collections was an estimated RM40 billion for 2014 which was subsequently reduced for unknown reasons to RM4 billion after it was highlighted that Sabah was entitled to 40%. This federal tax does not take into account taxes paid by international oil corporations and companies including Felda and major plantations that are based in Malaya and Sarawak where their taxes are paid but with operations and incomes derived from Sabah.
The GST from Sabah for 2015 is estimated at RM1.2 billion. Federal Customs collected about RM1 billion in 2014 from Sabah. Petronas collected about RM22 billion from Sabah’s oil and gas in 2014. Many other federal departments and agencies collect revenues derived from Sabah.
Just based on the known figures above and even assuming the lower federal tax of RM4 billion, Sabah’s 40% entitlement for 2016 would already be RM11.28 billion. The actual 40% returnable to Sabah would probably be many tens of billion annually. As for the arrears, it will be more than RM100 billion excluding interest.
Sabah would then no longer be the poorest in Malaysia but the richest and in the company of Singapore, Brunei and UAE, some of the richest per capital nations in the world. Each Sabahan including those yet unborn and all foreigners given dubious ICs and MyKads would probably have RM100,000 savings owed by the federal government.
Federal Ministers from Sabah as well as Sabah Umno and BN proxies and stooges would then be rushing to please their political masters in Putrajaya and raising the issue of federal allocations given to Sabah to sidetrack from Sabah’s 40% entitlement.
Let it be known that under the 10th Schedule, the only deductible item is grants given to the Sabah government from the revenues derived from Sabah and nothing else. Furthermore, in contributing the 60% to the federal government, it is to cover the anticipated allocations and costs of providing development and security for Sabah.
Therefore, the operating expenditure of the Federal Secretary’s office, all federal departments and agencies, development expenditure, costs of security including police, army, navy, maritime enforcement and Esscom are all covered in the 60% contribution.
Apart from the 40% entitlement, Sabah is also entitled to 10% export duty on petroleum and gas exported from Sabah. Given Petronas netting RM22 billion, Sabah would be entitled to another RM2.2 billion for 2016 based on 2014 figures.
CM Musa should also ask for unfulfilled promises, RM1 billion for repairs of more than 600 road slopes which have been outstanding since 2009, RM2 billion for road repairs and another RM700 million for upgrading of 62 bridges.
The road slope repairs and road repairs are not only urgent but more than justified as the Sabah government incurred losses estimated at more than RM2.55 billion due to landslides while bad road conditions have caused many accidents and road deaths.
For new development, Musa should ask for RM2.5 billion for Phase I of Kota Kinabalu Monorail System and another RM900 million allocation for the much needed 6 overhead interchanges in Kota Kinabalu that will help reduce traffic congestion and make Kota Kinabalu a more liveable city and more traffic friendly for tourists.
RM2.5 billion for KK’s monorail is not a lot given that the federal government has spent RM36 billion for the on-going LRT main lines with another RM32 billion allocated for 2 additional LRT lines in Greater Klang Valley in Budget 2015
Since PM Najib has openly announced initiating the devolution of powers in granting autonomy to Sabah and Sarawak, CM Musa should also be asking for allocations for such powers that are to be devolved to Sabah for 2016.
Whether Sabah will have a record breaking Budget 2016 will be known on November 20 when Musa tables the 2016 Budget at the State Assembly? All will be known whether Sabah leaders including CM Musa are brave to stand up for Sabah and insist on the 40% entitlement or fearful of having health problems and to be replaced by a new CM on November 21 by PM Najib.
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