MP: Billions lost to scandals, yet Sabah still waiting for its due

PARLIAMENT | Jonathan Yasin (GRS-Ranau) has questioned why Sabah still waits for its 40 percent revenue entitlement, even as billions of ringgit were lost to financial scandals and government bailouts over the decades.

Debating Budget 2027 in the Dewan Rakyat today, Jonathan (above) stressed that Sabahans did not begrudge federal spending to improve lives elsewhere in the country...

PARLIAMENT | Jonathan Yasin (GRS-Ranau) has questioned why Sabah still waits for its 40 percent revenue entitlement, even as billions of ringgit were lost to financial scandals and government bailouts over the decades.

Debating Budget 2027 in the Dewan Rakyat today, Jonathan (above) stressed that Sabahans did not begrudge federal spending to improve lives elsewhere in the country.

“If all the revenue collected from Sabah and Sarawak had been properly used to develop the country, we would be very happy.

“We are also happy if our friends in the peninsula live comfortably, if the Indian community is looked after, if the Chinese community is well cared for, and if the Malays are also well protected.

“But what disappoints us is the long series of major scandals that have taken place in this country over the decades,” he said.

Jonathan went on to list a series of financial scandals, including Bank Negara’s foreign exchange losses in the 1990s; the 1MDB and SRC International investments; and the government’s RM19.9 billion restructuring of Tabung Haji’s troubled assets.

He said such losses raised questions over arguments that the federal government’s financial position should constrain payments to Sabah.

“There have been so many scandals involving the management of the country’s finances.

“Yet Sabah is still not being paid what it is owed.

“The funds should have been available if the country had been managed properly.

“Payments to Sabah should also have been possible if the nation’s finances had been managed well,” he said.

Constitutional entitlement

Jonathan was referring to Sabah’s constitutional revenue entitlement under Article 112C and Part IV of the Tenth Schedule of the Federal Constitution.

Minister in the Prime Minister’s Department (Sabah and Sarawak) Mustapha Sakmud (above) said in May that federal and Sabah authorities were still negotiating the final 40 percent entitlement.

Discussions focused on four areas: the formula based on net federal revenue derived from Sabah, verification of revenue data, unresolved payments from the “lost years”, and a phased payment mechanism.

Jonathan argued today that Article 112D(2) of the Federal Constitution, which requires the federal government's financial position to be considered when reviewing the grant, was too vague.

He said the provision risked being used to delay or reduce what Sabah should receive.

“On the 40 percent issue, I believe there is no longer any moral justification or reason for the federal government to cite its own financial position as an excuse to avoid paying Sabah what should rightfully be paid,” he said.

‘Not that there is no money’

Jonathan also contrasted Sabah’s claim with federal spending on major projects in the peninsula.

“We see that a great deal of money is being spent in the peninsula.

“It is not that there is no money. But there is no payment to Sabah,” he said.

He urged Putrajaya to give Sabah’s entitlement priority before other spending.

“Pay Sabah what rightfully belongs to Sabah first.

“After that, the federal government can focus on other matters that need to be funded,” Jonathan said.

The government has raised the interim special grant for Sabah and Sarawak to RM1.5 billion while negotiations over Sabah’s final entitlement continue.

Jonathan argued that the interim amount remained inadequate, citing RM7.547 billion in Inland Revenue Board and Customs Department collections from Sabah last year.

Lauds RM18.7b allocation

Despite his criticism, Jonathan welcomed the RM18.7 billion federal allocation for Sabah under Budget 2027, up from RM17.6 billion this year and the highest among the states.

He nevertheless asked Putrajaya to specify how much of that sum would go directly to the Sabah government, rather than being spent through federal ministries and agencies operating in the state.

“There is a major difference between allocations handed directly to the state government, and allocations channelled through federal government agencies or ministries operating in Sabah,” he said.

Jonathan also said Sabah was not seeking preferential treatment but a resolution to an issue that has persisted for more than six decades.

“We are only asking for what belongs to us. We are not asking for anything more,” he stressed.