Revise Special Grant: LDP
Published on: Monday, October 26, 2015
Kota Kinabalu: Liberal Democratic Party (LDP) President Datuk Teo Chee Kang (pic) on Sunday urged the Federal Government to take immediate steps to reopen negotiations to revise the amount of annual Special Grant for Sabah.He said as far as Sabah was concerned, it was disappointing to note that after the first review of the Special Grant in 1969, where the amounts for the five subsequent years were determined, there has not been any review. "As such, the amount of annual Special Grant for Sabah stays at RM26.7 million since 1974 until today," he said to some 720 LDP delegates attending the party's 26th convention held at the Kian Kok School Hall, here.
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Speaking on Sabah rights and annual Special Grant for the State, Teo, who is also State Special Functions Minister, said it is a historical fact that on September 16, 1963, the Federation of Malaysia was formed by four components, namely Malaya, Sabah, Sarawak and Singapore. However, Singapore exited from the Federation in 1965. "Therefore, although Sabah and Sarawak are described as states under Article 1(2) of the Federal Constitution, when the Federal Constitution is read as a whole, the constitutional position of Sabah and Sarawak is different from that of the states in Malaya."Most, if not all, the contents of the 20 Points Memorandum from Sabah and the 18 Points Memorandum from Sarawak prior to the formation of Malaysia were incorporated into the Malaysia Agreement and subsequently absorbed into the Federal Constitution. "Until today, although our rights were diluted due to acts of our own past leaders, we maintain jurisdiction and autonomous power in land, natural resources, local government, immigration and other matters. There are also special protections and safeguards for Sabah and Sarawak in respect of our natives and financial provisions.
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"Pursuant to Section 2 under Part IV of the Tenth Schedule in the Federal Constitution, Sabah is entitled to an annual Special Grant of an amount equivalent to 40 per cent of the increase in the net revenue derived by the Federation from the State compared with such net revenue derived in the year 1963. This formula is peculiar to Sabah only, as similar grant for Sarawak consists of pre-determined sums."Such Special Grants are subject to periodical review by the Federal Government and State Government every five years. Any review must take into account the financial position of the Federal Government as well as the need of the State.
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"In view of the huge amount of revenue derived by the Federal Government from Sabah in the forms of import and export tax, income tax and the Goods and Services Tax (GST), the mere RM26.7 million per year is a pittance, as compared with the amount that could have been deduced using the said formula. "The State Ministry of Finance has been writing to their Federal counterpart but does not seem to receive an encouraging response. While we understand that the Federal Government's revenue is seriously affected by the drop in oil and commodity prices due to the global economy, they should show more sincerity by taking steps to discuss with us in a roundtable, failing which Sabahans cannot but feel that we are short-changed. Therefore, I urge the Federal Government to take immediate steps to reopen negotiations with a view to revise the amount of Special Grant for Sabah."He said there has been a joint meeting between State officers and their peninsula counterparts regarding the matter but that was in 2013 and ever since that meeting, there has not been any follow-up."We have been urging the Federal Government to fix a date for a follow-up meeting but have not received a good response from them. Therefore, it is LDP's firm stance that negotiations of revision of the Special Grant as provided for under the Federal Constitution must be reopened as soon as possible. "We cannot be getting just RM26.7 million every year since 1974 which is a pittance when compared to the net revenue the Federal Government can derive from Sabah. So if we were to follow the formula as provided, the amount can be very huge."When asked whether this issue has been raised in the State Cabinet, Teo said the Cabinet had already deliberated on the matter and the State Government is going to set up a committee to specifically look into the issue, including the interpretation of the various clauses in the Federal Constitution in respect of this issue."So we will be pursuing with the Federal Government to reopen the revision of the Special Grant because to us it is peculiar matter to Sabah and is in line with the empowerment of Sabah and Sarawak as announced by the Prime Minister. It is timely and there should not be any further delays on the renegotiation to revise the Special Grant.In addition, Teo also urged the Federal Government to transfer their entitlement of the five per cent oil royalty based on the value of the gross production to the State. He said the cash payment of five per cent of the value of gross production of oil in Sabah, more commonly known as the five per cent oil royalty, has been unceasingly brought up by opposition and ruling government leaders alike in Sabah and Sarawak. "Also In line with the move to empower Sabah and Sarawak, I am proposing that the Federal Government transfer its five per cent entitlement to the State, so as to increase the State's entitlement from five per cent to 10 per cent. "At the end of the day, Petronas is a company wholly owned by the Federal Government and therefore the latter has the right to dividends as well as petroleum tax imposed on Petronas. Such proposal will not affect Petronas (and the country's oil industry) in terms of the cost of oil at all."Stay up-to-date by following Daily Express’s Telegram channel.
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