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Sabah 40% special grant: Fed govt’s attempt to deny or failure of state govt?


14 April 2022


By looking at the statement it has raised concerns and questions as to whether such an agreement between the Federal Government and Sabah has infringed the constitutional right of Sabah?


- Does the federal government acknowledge that the 40% formula is still applicable? It is a very crucial matter because it was said by Finance Minister Tengku Zafrul that the 40% formula is no longer applicable. Now that would be a very worrying and dangerous stand or interpretation of the federal constitution from the federal government.


- On what basis was the 4.7 increments starting from 2022 was made? Was it based on the 40% formula or intention? If not, does that mean the State government of Sabah has conceded that our entitlement through the 40% formula can be ignored and not the basis of any review and hence set a precedent for future review to the detriment of Sabah?


- The statement said that within the 5 years from 2022 to 2026 the federal and State government of Sabah can still negotiate on the amount, But if this is a review pursuing article 112D FC, Then the next review can only be made after 5 years. On what basis can the Sabah government compel the federal government to further negotiate for any further review within these 5 years?


- I do not see in the press release that the federal government acKnowledge that the 40% formula is still applicable. Why is that? It was also said that the matter could be referred to an independent assessor if no agreement is reached. But if the federal government insist that the 40% formula is no longer applicable and that Sabah insist that it is, then we have a constitutional issue at hand in interpreting article 112C and 112D of the FC on whether the 40% formula is still applicable and should be the basis of any review. No matter how good an independent assessor can be, he/she can never replace the constitutional role of the Federal Court to adjudicate and decide on the interpretation of our Federal Constitution. An independent assessor cannot be asked to decide Which interpretation in the federal constitution is correct regarding the applicability of the 40% formula.


- I believe the State government of Sabah should have insisted that any review and agreement must be based on the 40% formula and if there is a need for further negotiation of a lesser payment to be made by way of a special grant, it should be made only after the federal government acknowledgement that any settlement or review must be based on the 40% formula.


Secretary-General of UPKO

Nelson W Angang