Budget 2016 Failed to Comply with Constitutional Financial Provisions for Sabah – Dr. Jeffrey

KOTA KINABALU - “Budget 2016 which blatantly disregarded and failed to comply with the constitutional provisions on revenues payable to Sabah clearly establishes that, as time passes, it is obvious that the Umno Malayan leaders and the federal government has no intention of honouring the basis of the formation of Malaysia” said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief in commenting on the Budget 2016 announcement.

In Budget 2016, PM Najib also failed to address the financial issues connected with the return of autonomy and devolution of powers back to Sabah as promised two months ago.

Despite receiving the Memorandum on the 40% net revenue and other additional revenues including the 10% export duties on petroleum exported from Sabah on 15 July 2015 and promising to honour the constitutional provision in the Tenth Schedule of the Federal Constitution and agreeing to form a Special Committee to look into it, PM Najib has missed the opportunity to put things right for Sabah.

The reluctance of the federal government to honour its financial commitments were further supported by the reports from the LDP Congress held over the weekend where the LDP President had said that the Sabah Finance Ministry had written to their federal counterparts to meet again and review the financial special grants including the 40% net revenue were met with no response.

With the warnings by the Sultan and Crown Prince of Johor that Johor can opt to secede if the terms of their agreeing to form the federation is not honoured, the PM and the federal government need to quickly ensure that they look into and comply with the terms and conditions that Sabah and Sarawak agreed to form Malaysia if they do not wish Malaysia to break-up.

Sarawak has already upped the ante by demanding for 20% oil royalties and return of autonomy and lately calls for re-visiting their 18-Points, the basis of Sarawak agreeing to form Malaysia.

In Sabah, simmering discontentment and unhappiness below the surface are beginning to boil over with calls for secession and respect for the basis of the formation of Malaysia.  The failure of Budget 2016 and failure to provide for return of the 40% net revenue and other special financial grants will only add to the calls for secession and compliance of the basis of Sabah agreeing to form Malaysia.

Very soon, the Sabah government will be under pressure to demand for the return of the 40% net revenue which exceeds RM20 billion annually and arrears of more than RM100 billion while the 10% export duties on petroleum will contribute an additional RM2 billion a year. Some of the undisputed computation of the 40% net revenue include federal taxes, GST, customs duties and collections by federal departments and agencies in Sabah.

While Budget 2016 has some good initiatives for neglected groups like the orang asli, Indians and natives of Sabah and Sarawak, they are minimal with crumb allocations and more could have been done.  

The lack of transparency and disguised statements on the Pan Borneo Highway and handouts of RM70 million for hill paddy which is even shared with Sarawak, RM142 million for the Samalaju Industrial Park, Sarawak and RM20 million for the Palm Oil Jetty in Sandakan, Sabah, and a few million here and there for Sabah and Sarawak compared to the overall Budget of RM267.2 billion does not show sincerity in helping develop the Borneo States. 

The expected drop in oil revenues of RM30.3 billion from Petronas in 2016 is no excuse to not provide sufficient allocations for Sabah and Sarawak as the revenue drop is more than offset by the RM39 billion expected from GST collections.

As it is, they still lag 30 years behind Malaya but contribute some RM100 billion annually to the federal coffers. Yet, Sabah and Sarawak continue to be marginalized in the Budget allocations with pittance.

SESB has announced that they need about RM4 billion to put electricity supply in Sabah to be on par with Malaya but only RM515 million is allocated to ensure reliability of electricity supply in Sabah.    At this rate, it will take Sabah some 8 years to catch but in 8 years’ time, Malaya would probably be 10 years ahead again and Sabah would not even be back to square one.

BN leaders are jumping up and down in glee over the RM16.1 billion Pan Borneo Highway in Sarawak and RM12.8 billion in Sabah but they have failed to read the fine print and in between the lines. In Sarawak, the highway will be completed in 2021 which means an annual expenditure of only about RM2.68 billion a year but Sarawak contributes more than RM55 billion a year to Petronas and the federal government.

In Sabah, there is no time frame stated for the Pan Borneo Highway and assuming the same time frame for completion, it is only an annual budget of RM2.13 billion, not even 10% of the collections from Sabah.

It is not as though RM28.9 billion was allocated in Budget 2016 for Sabah and Sarawak on the Pan-Borneo Highway as made out to be by BN leaders in supporting Najib. Such support may be blind or in hope of some droppings from the RM2.6 billion “Arab” donation.

Even if the Pan Borneo Highway can be built in full in 2016, the Budget has again failed to address the rural roads in Sabah where almost all village roads are still gravel and dirt roads where even ambulances are unable to reach and villagers have to send their sick by buffalo cart.

Neither was there any allocation for the RM2 billion needed for urgent road repairs and another RM700 million needed to urgently repair and upgrade 65 bridges in Sabah as lamented by the previous Sabah JKR Director as outstanding since 2009. Yet, there is not even a mention of any allocation in Budget 2016.

On education, by and large, Sabah has been left out again. There is no upgrading of Sabah educational institutions. For instance, the Timbang Menggaris Agriculture Institute should be funded and upgraded into an agriculture and forestry based university. There is also no special allocation for repairs of the more than 600 dilapidated schools in Sabah and Sarawak of which RM1 billion was promised more than 3 years ago.

As for the proposed development budget of RM52 billion in 2016, inclusive of a RM2 billion contingency, again Sabah and Sarawak were given the miss. Out of the RM50 billion allocated for 2016, RM18 billion will be spent for the Refinery and Petrochemical Integrated Development Project (RAPID) Complex in Pengerang, Johor. Yet nothing for Sabah and Sarawak which produce the bulk of oil and gas in Malaysia.

New highways for Malaya in 2016 will include the highways of Damansara – Shah Alam, Sungai Besi – Ulu Klang, Pulau Indah and Central Spine Road while another RM900 million is provided to implement the Jalan Tun Razak Traffic Dispersal Project.

For other public transport networks, Budget 2016 will see the commencement of construction of the Sungai Buloh – Serdang – Putrajaya MRT II project spanning 52 km. costing an estimated RM28 billion spread over 7 years and scheduled to be completed by 2022.   Another RM10 billion will be spent for the LRT3 project from Bandar Utama, Damansara – Johan Setia, Klang spanning 36 km, scheduled for completion in 2020.

And what will Sabah get?

A lousy and miserable Rapid Transit Bus (BRT) project in Kota Kinabalu costing less than RM1 billion. A bus system at that, not even a monorail or LRT for Kota Kinabalu.

An allocation of RM260 million is provided to ensure price uniformity of selected items nationwide through the 1 Price 1Sarawak and 1 Price 1Sabah programmes. If past allocations to reduce prices in Sabah and ensure uniformity of prices is an indication it would be another RM260 million to be wasted. It would have been cheaper and more effective in reducing costs of living in Sabah and Sarawak if the crippling cabotage policy is abolished.

All considered, the federal government should not blame Sabahans and Sarawakians if they think that there is no more benefit to remain in the Federation of Malaysia. Perhaps, the people should re-assess their support for the BN Sabah and federal governments and throw them out in PRU-14.

• Budget 2016