‘Greedy’ Umno’s lopsided budget for S’wak…Federalism ala BN.

In 2014, Sarawak is expected to contribute over RM76 billion towards Petronas and the federal government’s coffers; in return Prime Minister Najib has offered RM2 billion.

Awang Abdillah | (FMT) November 11, 2013


The federal government has been operating on straight deficit budgets since 1998. The latest budget for 2014 as announced on Oct 25 is no different.

Throughout this period there has been no undertaking to adopt fiscal reforms to attain surplus budgets resulting in accumulative national debt to the tune of about RM520 billion as of end June 2013, as reported by the Finance Ministry.

This direct consequence of 16 years of deficit spending does not include the unreported borrowings and unaccounted expenditures by those in the corridors of power.

The deficit spending in 1998 was initially caused by the impact of the Asian financial crisis of 1997 -1998. The crisis saw the ringgit plunge in value against foreign currencies and the crash of the stock market.

It pushed many businesses to the brink of bankruptcy. The government too had suffered from falling revenue compelling it to operate on a deficit budget.

But from 1999 onwards despite favourable economic recovery including the pegging of the ringgit at US$1 to RM3.8 on 1 September 1998 , the Mahathir government continued to operate on a fiscal deficit.

Unfortunately Tun Dr Mahathir Mohamad’s modus operandi was against the rule of law and good economic procedures.

Projects were awarded to his family members, Umno crony companies and GLCs by way of inflated prices and without open tenders. These entities went on to make monstrous profits to pay off the debts and make money for themselves.

His then deputy and Finance Minister Anwar Ibrahim, who opposed him was sacrificed through a web of conspiracies.

Prime Minister Najib Tun Razak’s appointment as the premier in 2009 provided his government with the golden chance to rectify the fiscal imbalances left by his two predecessors.

But instead of cutting back, Najib continues the splurge.

Lion’s share vs ‘mouse’ funds

The essential and main target of the 2014 budget should have been two pronged – to reduce the deficit and maybe even attempt to attain a surplus and to rectify the unjust fund distributions meted out to Borneo.

In the budget total development allocation for Sarawak and Sabah amounted to a mere RM2.049 billion.

Of this RM500 million is provided for the upgrading of the Pan-Borneo highway.

Now compared this to the RM16.5 billion lion’s share of the budget allocated to the Prime Minister’s Department.

The PM’s Department is essentially an administrative body that includes agencies like the Election Commission and the Malaysia Anti-Corruption Commission (MACC) which incidentally is not directly involved in development projects.

So where is the justification for RM16.5 billion allocation.

In 2014 Sarawak is expected to contribute over RM76 billion to the national coffers. Here’s the breakdown:

Gross revenue generated in billions (RM) by Sarawak is:

Sarawak LHDN: RM4.00 (estimate)

Liquefied natural gas: RM55, 526,393,529.00 (year 2012 )*

Petroleum: RM21,273,791,988.00 (year 2012 ) *

Total: RM76,800,185,521

(Figures for Sarawak year 2013 and Sabah year 2012 were not available)

Now deduct 20% for cost of operations and 5% royalty to Sarawak.

That will leave Petronas and the federal government with net earnings of RM57,600,139,140.75 billion to the last sen.

My question to the people of Sarawak, is can you accept greedy Umno’s Budget 2014 allocations of RM2.049 billion to be shared with Sabah?

Awang Abdillah is a political analyst, writer and FMT columnist.

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