KUCHING: Sarawak will not go bankrupt in three years’ time as claimed by DAP, says Chief Minister Datuk Patinggi Abang Johari Tun Openg.
This is because the Gabungan Parti Sarawak (GPS) state government has its own means of raising funds, he said.
He said this included imposing state sales tax on certain products and setting up the Development Bank of Sarawak (DBOS), enabling the state to table an annual budget averaging RM10bil for 2019 and 2020.
“Someone said we would go bankrupt in three years. But Sarawakians are not ‘paloi’ (stupid). We have our own way, our own resources and we have constitutional rights on taxation.
“So we impose sales tax on exports produced in Sarawak, including oil and gas, ” he said when opening the inaugural GPS convention at the Borneo Convention Centre Kuching yesterday.
The state’s 2019 budget was a record RM11.9bil while the Budget for next year, which was approved this week by the Sarawak Legislative Assembly, totalled RM9.891bil.
On Wednesday, Sarawak DAP chairman Chong Chieng Jen was quoted as saying that the GPS state government was “heading down the path of bankrupting Sarawak within three years” if it continued with the “reckless spending” contained in Abang Johari’s Budget speech.
According to Chong, the total approved expenditure in the 2020 state Budget was RM9.7bil while the state government proposed to spend RM22.5bil next year, with the additional funds to be raised by borrowing from DBOS in a so-called alternative financing model.
“At this rate, in no time the state government will incur more debt than its reserve funds and soon, if left unchecked, this will snowball to an amount that is beyond the state government’s ability to repay, ” he said in a statement.
But Abang Johari said DBOS was set up as the state’s financial institution to provide much-needed funding for development.
He said the state needed to generate its own revenue as the federal government had failed to fulfil its manifesto promises of increasing the oil and gas royalty to 20% and giving back to Sarawak 50% of taxes collected in the state.
“We will use the alternative funding to build roads and bridges and provide water and electricity supply.
“Bridges are not built in one day. The Batang Lupar bridge will take at least 48 months, so we will make progressive payments over this period.
“The amount will be factored into our annual Budget. It’s very simple.
“Sarawak will not go bankrupt as long as GPS is the state government, ” Abang Johari said.