KUCHING: The 20% oil royalty was and is a demand from Sarawak and not a gift from the Federal Government.
In stressing this, Chief Minister Datuk Patinggi Abang Johari Tun Openg pointed out that Pakatan Harapan Sarawak had the audacity to make a pre-election offer of 20% oil royalty and 50% of all taxes collected in the state to the Sarawak Government for it to spend on education and healthcare.
“But they do not even know how to define the oil royalty properly.
“On income and other tax revenues, in fact, we would insist on 100% of the revenue from Sarawak be returned to the state for our government spending, not just 50%,” he said.
Johari said that when the state talked about autonomy it was talking about devolution of power and its financial implications.
“We are not foolish to accept political and economic autonomy without properly looking into the financial aspects.
“Autonomy means access to our financial resources and spending them according to our goals, “ he said.
The chief minister added that the original financial plan for Malaysia was for the Federal Government to take the income and other tax revenues from Sarawak and spend them in the state on matters of national interests such as law and order, security, education and public health.
“Along the way, the Federal Government has also taken away our rights over our oil and gas as well as deep-sea marine fishery resources.
“As a result, much of Sarawak is under-developed and we have to rely on the exploitation of our land-based resources for our own development, leading to unwanted environmental issues, “ added Abang Johari.
On the imposition of the State Sales Tax on petroleum products, he said he would like to thank the federal leaders for their views.
“I respect their views and concerns. However, as I have mentioned several times, on the imposition of the sales tax, the state has the legitimate power (to do so) as enshrined under the Federal Constitution.
“Therefore, this decision ought to be respected, “ he added.
“It cannot be denied that the Federal Government, since the enforcement of the Petroleum Development Act, 1974, has gained tremendous financial benefits from the production of oil and gas from Sarawak.
“These benefits are derived from the receipts of tax from petroleum income, taxes from corporate incomes, dividends from Petronas and associate companies and royalty,” he said.
Johari revealed that the combined financial benefits made up more than half of the share of revenue from oil and gas.
“One can easily compute, the huge financial benefits gained by the Federal Government as well as Petronas over the past 42 years which contributed to the prosperity of Malaysia, “ said the chief minister.
He said in the case of Sarawak, the only revenues from oil and gas were a mere 5 percent royalty and dividend from investments in MLNG.
“Over the past 42 years, the revenue from the 5 percent royalty to the state amounted to only RM33.5 billion.
“This quantum of revenue from oil and gas is rather insignificant compared to the financial benefits received by the Federal Government.
“As such, we have not been able to enjoy fully the benefits from oil and gas resources extracted from our land,”he said.
Johari said at this juncture, it had to be noted that last week it was reported that Petronas would give a one-off dividend of RM30 billion from its reserves to the Federal Government.
“It takes Sarawak 42 years to accumulate RM33.5 billion financial benefits from its oil and gas. What an irony!,” said the chief minister.
