KOTA KINABALU : -The Madani government must demonstrate the same political will in addressing the 40% net revenue entitlement for Sabah as it has shown in implementing the diesel subsidy rationalization, said Bersatu Sabah Women’s Chief, Rahimah Majid.
“The majority of Sabahans expect the Prime Minister to address this issue decisively when he chairs the upcoming Malaysia Agreement 1963 (MA63) meeting on Thursday—nothing less.
“We can no longer tolerate delays or mere lip service from the Federal government, as experienced under previous administrations. We also call on the Sabah government to be as bold and resolute as Sarawak in defending our rights and dignity, and not to settle for anything less in this meeting,” she emphasized.
In a statement issued today, Rahimah emphasized that the MA63 meeting presents an excellent opportunity for PMX to back up his words with action, specifically in implementing MA63. She recalled that when launching the Malaysia Madani concept, the government pledged to resolve the critical issues outlined in MA63.
“The return of the 40% net revenue is vital. For over five decades, Sabah has been marginalized and remains one of the poorest states in Malaysia with 8 out of the 10 poorest districts.
“In 1974, the Petroleum Development Act (PDA) granted the Federal government control over oil and gas reserves nationwide, with Sabah and Sarawak receiving a mere 5% royalty. Despite contributing over half of Malaysia’s total oil output, much of the revenue was diverted to develop Peninsular Malaysia, to the detriment of Sabah and Sarawak.
“For example, earlier this year, the Federal government approved a RM 10 billion LRT project for Penang but only offered Sabah an interim payment of RM 300 million for the 40% revenue owed. This starkly illustrates how Sabah continues to be shortchanged and overlooked.
“PMX now has the chance to rectify this historical injustice by doing what his predecessors failed to do, and in doing so, secure a meaningful and lasting legacy in Malaysia’s history,” she said.
Rahimah reminded that under Article 112C of the Federal Constitution, Sabah is entitled to 40%—or two-fifths—of the net revenue collected by the Federal government from the state. This entitlement which amounts to more than RM10 billion annually reflects Sabah’s contribution to the nation’s revenue and its special financial rights under MA63.
She noted that the last recorded payment of this 40% entitlement of RM26.7 million occurred in 1973, after which payments continued at RM26.7 million until 2021 without any further mandatory review every 5 years. The amounts were raised to interim payments of RM125.6 million in 2022 and RM300 million in 2023.
Decades of negotiations between Sabah and the Federal government have yet to yield a resolution, so much so that the Sabah Law Society had taken up a suit for a judicial review which is now pending before the Courts.
This matter is now under the purview of the Malaysia Agreement 1963 (MA63) technical committee, chaired by Deputy Prime Minister Datuk Seri Fadillah Yusof.
In July last year, Fadillah indicated that a formula for the special grant or net revenue claim was expected to be finalized within a year, by July 2024. However, nothing has transpired since then and the full MA63 Technical Implementation Council is now scheduled this coming Thursday in Kota Kinabalu and to be chaired by the Prime Minister himself.
A lawyer by profession, Rahimah reiterated that Sabah must never forfeit its constitutional right to the 40% net revenue grant, as outlined in Articles 112C and 112D of the Federal Constitution.
“Article 8 of MA63 empowers the governments of Malaya, Sabah, and Sarawak to take legislative or executive action to implement the recommendations in the Inter-Governmental Committee (IGC) Report, where they are not explicitly addressed in the Constitution.
“Chapter 3 of the IGC Report’s Financial Provisions (8) clearly articulates Sabah’s right to 40% of its revenues and provides for the appointment of an independent assessor if consensus cannot be reached.”
Rahimah further criticized the Gabungan Rakyat Sabah (GRS)-led state government for its lack of commitment, stating that if it were genuinely committed to Sabah’s rights under MA63, it would have convened a Special Assembly sitting and issued a strong declaration on the 40% revenue entitlement.
“To date, there has been little action from the state government. If it is truly serious about defending Sabah’s rights, it must act decisively, not just talk.
“If a Special Assembly sitting had been held and the Federal government still failed to respond appropriately, the state could have pursued legal avenues to seek redress.
“All Sabah politicians must unite to apply strong pressure on the Federal government to honor Sabah’s rights under MA63, as they were elected to protect these rights,” she concluded.
