Better for Sabah to retain the 40% at source

KOTA KINABALU - The State Government should insist on a time frame for the payment of arrears from the federal government,said Institute For Development Studies(IDS) chairman Tan Sri Simon Sipaun.

Simon, who was commenting on the 40 per cent net revenue derived from Sabah under the Malaysian Agreement 1963(MA63), asserted that the state government should take action to calculate the total amount of funds due to Sabah. 

“Since it is so difficult, if not impossible, for Sabah to get back its 40 per cent share as past events indicated; it might be a good idea to retain the 40 per cent at source and save the trouble and hassle of returning the 40 per cent,"he said. "I used to work in the Sabah Ministry of Finance from 1981 to 1988. I remember, we as state officers used to raise Sabah's entitlement under the Federal Constitution-two-fifths (40 per cent) of the net revenue collected from Sabah, which was agreed upon during the formation of  Malaysia and was subsequently incorporated in the 10th Schedule of the Federal Constitution. 

"In those days, I hardly heard of the MA63 being discussed or raised.At the government officers' level, the so-called net revenue was interpreted by federal officials as the amount of revenue collected by the federal government in Sabah, minus the amount spent on Sabah."To us at the state level, it had nothing to do with the amount spent on Sabah by the federal government as it was the responsibility and obligation of the central government in a federal system (to do so)," he said in his speech at IDS' panel discussion on Net Revenue Sources Under MA63 at Wisma Sedia, here on Tuesday.

He said this is a serious matter that is akin to not honouring the Federal Constitution,which is the supreme law of the land.

“Now the federal government tells us that it does not have enough money and therefore was unable to pay what is due to Sabah. This excuse is unacceptable. It (the federal government) will never have enough money," he added.

Simon pointed out that under the 10th Schedule of the Federal Constitution, Sabah is entitled to an annual capitation grant.

“Currently, I understand that Sabah is being paid 5 per cent cash payment in lieu of royalty, based on gross production of oil in Sabah. However, under the Federal Constitution, both Sabah and Sarawak are entitled to impose a maximum of 10 per cent royalty.

"It is suggested that the provisions of the Federal Constitution should be honoured for a start. New formulas that are agreeable to all parties could be worked out later,” he said.

He reckoned that, if the State Government were financially strong, it would be in a much better position to plan and implement development projects especially in the rural areas.

"Political autonomy is meaningless unless it is accompanied by financial autonomy. The one who holds the purse calls the shot.

“No amount of nice sounding slogans, manifestos and promises will improve the standard of living of the poor. Such phrases will remain mere rhetoric. Money is needed to make things happen and to make a difference for the better," he said.

During the event, Simon had also moderated the panel,which was participated by Kemabong assemblyman Jamawi Jaafar and Sabah Law Society president Brenndon Keith Soh.

By Neil Brian Joseph