State to continue pursuing rights agreed in MA63

22 April 2024

By Nabalu News Journalist

KOTA KINABALU: The Minister of Finance Datuk Masidi Manjun said on June 10, 2022, the Sabah State Government submitted to the Federal Government through the Minister of Finance Malaysia the calculation of Special Grants for the year 2021 using the formula in Article 112C and Part IV of the Tenth Schedule of the Federal Constitution.

Under the current Federal Government, through the Technical Committee Meeting of the Implementation Action Council Malaysia 1963 (MTPMA63) No. 01/2023 held on July 18, 2023, it was decided that the Federal Government and the Sabah State Government will continue negotiations to finalize the formula for the Special Grants. The negotiation period is one (1) year starting from the date of this meeting, which is July 18, 2024, he said during the State Assembly Sitting today.

He was answering the questions by Datuk Seri Panglima Bung Moktar bin Radin [Lamag] who asked the finance minister if the Government intend to propose that an independent appraiser be appointed pursuant to Article 112D Clause 6 to determine the appropriate amount of Special Grants from the Federal Government as per the provisions of the Federal Constitution Tenth Schedule Part Four Subsection 2(1).

He was also answering Ewon question if the government identified the federal revenues in Sabah and how much they are as well as Ewon’s question if an official claim been submitted to the Federal Government to demand 40% payment under Article 112C of the Federal Constitution.

Masidi said the State Government has established the Review Committee for the Value of Special Grants in Sabah to review and finalise the value of the Special Grants. This committee is jointly chaired by the Attorney General of Sabah and the

Permanent Secretary of the Ministry of Finance Sabah.

The committee members also include the Legal Advisor to the Chief Minister, the Director of the State Economic Planning Unit, the State Treasurer, and an Independent Advisor.

This includes reviewing and examining the original formula for calculating Special Grants. 5.2. Reviewing and examining the term "Net Revenue." 5.3. Reviewing and examining data (including identifying Federal revenues in Sabah, Federal government expenditure on administration and development in Sabah, the financial needs of the State Government, and the calculation documents for Special Grants for early years such as 1963, 1964, and 1965).

However, the State Government faces challenges and constraints in calculating the amount of Special Grants due to incomplete financial data from the Federal Government. Various methods and initiatives have been undertaken to obtain this data from the Federal Government.

“The State Government has submitted eight (8) requests for data sharing to the Federal Government since January 2022, but the Federal Government has not yet provided the data except for the Inland Revenue Board of Malaysia.

“Therefore, the Review Committee for the Value of Special Grants in Sabah has recommended that the State Government adopt an approach to make phased claims with a negotiation strategy to be presented to the Technical Committee of the Implementation Action Council Malaysia 1963 (MTPMA63) chaired by the Deputy Prime Minister at a later time.”

“As has been emphasized before, the Sabah State Government firmly adheres to maintaining the original formula of Special Grants as stipulated in Article 112C and Part IV of the Tenth Schedule of the Federal Constitution which is two-fifths or 40% of the Net Federal Revenue in Sabah,” he said.

According to him, since negotiations on the amount of this Special Grant began, the Federal Government has paid RM125.6 million in 2022 and then RM300 million in 2023 which the State Government agreed to accept as an interim settlement.

“I would like to remind you that the matter regarding this Special Grant is still in the negotiation process, I am confident and believe that the negotiations between the Federal and State Governments will yield the results we have been waiting for so long for the interests and well-being of the people in this state.”

However, when the negotiation period of one-year ends and if the negotiation fails to reach any agreement, then the State Government has the option to appoint an independent appraiser in accordance with Article 112D (6) of the Federal Constitution, he stated.

He emphasized that when it comes to fighting for the rights of the state of Sabah, no full stop has ever crossed the mind of the State Government let alone the rights that have already been agreed upon under the Malaysia Agreement 1963.