Imagine Musa Tabling a RM40 Billion 2014 Sabah Budget–Dr.Jeffrey

Kota Kinabalu:  “The Chief Minister should be able to table a record-breaking RM40 billion Sabah Budget for 2014, if the calls by Malay ultras to chase out Christian Malaysians and Sabah out of the Federation are realized before year-end”said DatukDr. Jeffrey Kitingan, STAR Sabah Chief, rueing what could happen to the Sabah economy for 2014 with the CM due to present the 2014State Budget  .

The RM40 billion budget, a ten-fold increase from the historical RM4.048 billion spent for 2013, will set Sabah’s economy into lift-off into the super league of wealthy nations. 

It may be a record of sorts but RM40 billion revenue is a conservative estimate.  Oil revenue will contribute RM20 billion, half of the total revenue, which is not unexpected given the current world oil prices of above USD100 per barrel.   The federal tax department announced it could collect up to RM40 billion for 2013 from Sabah.

Add to it, all the federal departments’ collections from Sabah could be another several billion ringgit.  The corporate sector could contribute many billions more now that they will have to pay tax on revenue based on income derived from Sabah.  Palm oil revenue could be very significant as Sabah is the world’s third biggest producer of crude palm oil, about 36% of Malaysia’s total of about RM73 billion a year.

Local contribution of State revenue is estimated another RM2.4 billion based on 2013’s estimated revenue of  RM3.828 billion inclusive of RM1.42 billion from federal coffers.  In fact, looking at the figures, the 2014 Budget could exceed RM60 billion all in.

For 2013, the estimated expenditure was RM663.17 million for emoluments, recurrent expendituresof RM1,087.93 million and special expendituresof RM2,337.38 million (which formed the bulk of the RM2.42 billion development expenditure).

Giving a 6% increase, the emoluments will rise to RM702.96 million and RM1,153.21 million for recurrent expenditures, totalling RM1,856.17 million.  

To create a quantum leap in the economy and development, each of the 60 Constituencies could be allocated RM300 million each (RM25 million per month), totalling RM18 billion, a 7-1/2 times increase from 2013.  In other words, Sabah will get development in a single year of what would take 7-1/2 years to achieve given the 2013 Budget. And to alleviate the people’s financial position, each of the 3.2 million Sabahans will be given a RM1,000 special dividend which will utilize another RM3.2 billion.

The total Budget expenditure will total RM23.05717 billion leaving a surplus of RM16.94283 billion.

Assuming Sabah takes back control of the security forces comprising some 16,000 police, PGA and maritime personnel, which may cost Sabah another RM600 million.    Putting aside RM1.0 billion should be able to cover the additional costs of assuming State control of the security forces including 5,000 army personnel.

That would still leave a healthy and hefty RM15.94 billion to be added to Sabah’s reserves which is said to be about RM3 billion currently.

Even with prudent financial planning, Selangor, the richest Malaysian state only managed to increase its State reserves from RM700 million in 2008 to RM3 billion in 2013.

Imagine RM15.94 billion reserves in 2014 alone, Selangor would seem poor in comparison and probably take another 20 years to catch up.   The RM15.94 billion reserves will result in each and every Sabahan having a healthy credit balance of RM4,981 compared to the national debt of some RM600 billion or RM21,000 debt for every Malaysian.

In fact, Sabah would be in the company of Singapore and Brunei.  Speaking of Brunei, petrol and diesel price in Sabah could be at RM1.35 per litre, equivalent to Brunei.

The RM40 billion Budget is not wishful thinking.  It will be reality if the federal government agree with and allow the Malay ultras to succeed in chasing out Sabah from the Federation.  It’s something for each and every Sabahan to ponder on.

Datuk Dr. Jeffrey Kitingan

Chairman, STAR Sabah

13 November 2013

EPU Report Re-Affirms Chronic Poverty in Sabah–Dr.Jeffrey

Kota Kinabalu:    “The recent disclosures of the poverty and abject poverty figures for Sabah, Sarawak and the nation by the Economic Planning Unit (EPU) of the PM’s Department clearly contradicts the rosy picture painted by the Sabah government on the alleviation of poverty in Sabah," said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief, commenting on the poverty levels in Sabah.

According to EPU figures, Sabah had 53.5% of the abject poor households in the nation while Sarawak accounted for 11.4%.   In the poor household category, Sabah had 39.3% while Sarawak had 11.7%. 

No.	Description	Sabah	Sarawak	Peninsula	National
1	No. of abject poor households	8,457 (53.5%)	1,801 (11.4%)	5,547 (35.1%)	15,805 (100%)
2	No. of poor households	42,400 (39.3%)	12,600 (11.7%)	53,000 (49.0%)	108,000 (100%)

Whatever the cut-off points in the definition of abject poor and poor categories and the number of households involved, the percentages reveal glaring failures of the federal and Sabah governments in resolving the poverty problems in Sabah.  

The efforts of the Sabah government in reducing poverty levels in Sabah are poor and miserable compared to the efforts of the Sarawak government, if the numbers of the Prime Minister’s Department are relied upon.   Yet, the Sabah government has been boasting that they have done a good job in reducing poverty in Sabah.

In truth, in the villages and even in urban and suburban areas of Sabah, one only need to see and ask casually of the poverty levels and it will not be surprising that there are more than 8,457 abject poor households and 42,400 poor households.    The real numbers will probably be 5 to 10 times more.

The irony of it all that while Sabah and Sarawak are the poorest in Malaysia, they are the two (2) biggest oil and gas producers and contributed about RM18 billion and RM45 billion respectively to Petronas and the federal government in 2012.   On their part, Sabah only received about RM941 million and Sarawak RM2.37 billion for their 5% share.

As a figurative comparison to totally resolve the 8,457 and 1,801 households in Sabah and Sarawak, it will only cost a one-off sum of RM820.64 million.   This is derived by giving each household the equivalent of RM80,000 comprising a house costing RM40,000 and another RM40,000 in special agricultural grant to develop their own 15 acres plot of land.   Assuming a RM300 monthly return on each acre of their agriculture, they will be each getting RM4,500 per month in household income, higher than most university graduates’ income.   

What is RM820 million compared to the RM63 billion of oil and gas “stolen”annually from Sabah and Sarawak?

  

On a more serious note, the Sabah government should take immediate steps look into and help solve the poverty problems of these 8,457 and 42,400 households.

One of the most immediate steps that can be taken by the Sabah government is to seek an immediate increase of the oil payment from 5% to 20% from Petronas and the federal government which will bring Sabah an additional revenue of RM2,823.75 billion based on 2012 figures given by the Sabah government.

This 20% is not wishful thinking as it has even been declared by the Chief Minister that the government will be seeking a review of the oil payment.   Unless of course, this is an empty promise and election gimmick given during the run-up the GE-13.

And the Sabah coffers will be further increased with return of the 40% net revenue collected by the federal government from Sabah as provided under the Tenth Schedule of the Federal Constitution.

Datuk Dr. Jeffrey Kitingan

Chairman, STAR Sabah

12 November 2013