Special grants: RM260mil for Sabah, RM300mil for Sarawak while govt works out new formula, says PM

KUCHING: The Federal Government will increase the special grants to Sabah and Sarawak under Article 112D of the Federal Constitution based on a suitable formula, says Prime Minister Datuk Seri Anwar Ibrahim.

As the formula is still being finalised, he said Sarawak would receive RM300mil for a start, up from RM16mil previously, while Sabah's amount would be increased from RM26mil to RM260mil.

He said the formula was important so that Sabah and Sarawak would receive a reasonable amount based on the government's financial position.

"We have to look at the special grants in a reasonable and fair manner. Over the years Sarawak was only given RM16mil, which I don't think is reasonable.

"At the same time, we cannot afford too big a sum," he told a press conference after chairing the Malaysia Agreement 1963 (MA63) implementation action council here on Friday (Jan 20).

Under Article 112D, Sarawak and Sabah are entitled to annual special grants from the government, starting with RM16mil and RM26mil respectively.

A review of the grant is provided for once every five years subject to the government's financial position and the needs of the states, but the amount has not been raised over the years.

Anwar said he agreed to Sarawak Premier Tan Sri Abang Johari Tun Openg's proposal for a clear formula to determine the amount of the grant.

"(The grant) is subject to the formula, so Sarawak (for example) is not tied to the amount of RM300mil.

"The formula needs to be fine-tuned so that it can be used (to determine future amounts)," he said.

Last year, Abang Johari had called for the special grant to be based on a revenue-sharing formula instead of a fixed amount.

This would allow the government to determine the amount based on its financial position.

Anwar also agreed that the grant should not be tied to a fixed amount, saying it was understood that the amount would be lower if the government did not have the financial ability.

"But we should be able to afford more than just RM16mil a year, which makes a mockery of our interpretation of (MA63)," he added.