KUCHING: Sarawak is awaiting federal agreement on its proposed formula for determining the special grant under Article 112D of the Federal Constitution, as it continues to push for a fixed and transparent basis for calculating future payments.
Deputy Minister in the Premier’s Department (Law, MA63 and State-Federal Relations) Datuk Sharifah Hasidah Sayeed Aman Ghazali said Sarawak has presented its proposed formula to Putrajaya, but no agreement has been reached.
“We have presented them with a formula as the basis for calculating how much the grant should be. There must be some basis for calculation because at the moment, they can decide, ‘This year I give you this much, the next five years I give you that much.’
“What we are saying is: no, this ought to stop and there should be a certain formula,” she said in an exclusive interview with Sarawak Tribune.
The proposed formula is not new, with Sarawak having disclosed as early as 2022 that it had submitted a formula to the federal government for the review of its special grant.
In February this year, Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg outlined a proposed revenue-based mechanism under which 20 per cent of revenue generated by Sarawak could be returned to the State.
Under the proposal, the amount would fluctuate according to Sarawak’s revenue performance rather than being based on a fixed quantum.
Sharifah Hasidah said the formula was prepared by the State Financial Secretary, although the mechanism ultimately adopted remains subject to negotiations with Putrajaya.
“There has to be some basis of calculation, whether it involves a percentage of our tax or whatever mechanism is agreed upon. We have presented the formula to them, but they have not agreed to it yet,” she said.
Sharifah Hasidah said the special grant under Article 112D is specifically provided for Sabah and Sarawak and is supposed to be reviewed every five years.
However, Sarawak’s position is that the grant has not been properly reviewed since 1963.
“For both Bornean states, this grant must be reviewed every five years. However, it has never been properly reviewed since 1963 and we believe it should be.
“So we have put forward to the Federal Government that there should be a proper review of the grant every five years,” she said.
At present, Sarawak receives RM600 million as an interim special grant.
Sharifah Hasidah expressed appreciation for the increased amount but stressed that the interim payment does not resolve Sarawak’s push for an agreed formula.
“At the moment, they are giving us RM600 million, and we are very thankful that they increased it. But we still say: you need a formula because you cannot just give us an amount as you wish,” she said.
Sharifah Hasidah said an established calculation mechanism would provide certainty over the quantum of the grant from one review period to another.
She also said the absence of a final decision means the formula remains among the outstanding matters being pursued by Sarawak with the Federal Government under the Malaysia Agreement 1963 (MA63).
“If there is a basis for calculation, then there is certainty,” she said.
As of late June, negotiations on the proposed formula remained ongoing, with Deputy Prime Minister Datuk Amar Fadillah Yusof saying the matter was awaiting a decision from the Ministry of Finance.
Earlier in February, Fadillah said no formula had been finalised and that negotiations would involve the Federal Ministry of Finance and the Sarawak State Financial Secretary’s Office before the outcome was considered by the MA63 Technical Committee.
