RM300 million per year in special allocation for Sabah and Sarawak

29 November 2023

KUALA LUMPUR: The Federal Government has increased the rate of special interim allocation for Sabah and Sarawak to RM300 million per year starting from 2023.

Prime Minister, Datuk Seri Anwar Ibrahim said that previously the allocated rates were RM16 million for Sarawak and RM125.6 million for Sabah.

"The new rate of special allocation for Sabah and Sarawak has been increased to RM300 million starting from 2023.

"This interim rate is an increase from the current amount of RM16 million per year for the state of Sarawak since 1969 and RM125.6 million for the state of Sabah for the year 2022 through an interim review that was implemented for Sabah in 2022.

"The payment for the special allocation in 2023 at the new rate of RM300 million was finalized yesterday (28th November 2023) through the disbursement to the governments of Sabah and Sarawak," he said in a statement to the media today.

Anwar stated that the Federal Government, together with the governments of Sabah and Sarawak, have reached an agreement to review the rate of the special allocation under Article 112D of the Federal Constitution, effective from 2023, as an interim solution while the process of finalising the long-term review formula for the special allocation is ongoing.

He said that the interim solution was decided during the Meeting of the Implementation Action Council of the 1963 Malaysia Agreement (MTP-MA63) held on 20th January 2023 and was presented in the 2024 Budget.

"The agreement covers the following matters: the Federal Government, together with the governments of Sabah and Sarawak, is committed to continuing negotiations and implementing a review of the special allocation rates under Article 112D of the Federal Constitution to finalise the formula for determining the allocation rates provided for under Article 112C of the Federal Constitution.

"The Federal Government, together with the governments of Sabah and Sarawak, will conduct a review of the special allocation taking into consideration the needs of the governments of Sabah and Sarawak regarding the costs of state services and the financial position of the Federal Government under Article 112D(2) of the Federal Constitution," he said.

The Prime Minister stated that in order to implement the review of the new special allocation rates based on Article 112D(1) and 112D(5) of the Federal Constitution, the Federal Constitution (Review of Special Allocation under Article 112D) Order (Sabah) 2023 and the Federal Constitution (Review of Special Allocation under Article 112D) Order (Sarawak) 2023 were gazetted in the Federal Gazette on 24th November 2023.