State Of Finances - Sarawak Sayangku Masih Dapat Bernafas Ke ?
Of the RM10.012 billion revenue that Sarawak is estimated to earn in 2021, some RM3.034 billion (30% or almost 1/3 of the total estimated revenue) will come from the State Sales Tax on O&G products. This was clearly stated in the Sarawak’s 2021 budget, tabled Nov 2020.
The budget has among other things estimated that there will be a surplus of about RM180 million, a very commendable figure indeed given that at the time the budget was tabled the figures of Covid.19 infections were not encouraging at all.
In Sept 2020 Petronas paid Sarawak RM2.95 billion, being the Sales Tax accruing on O&G products for 2019. In the 2021 Sarawak’s state budget, the amount of sales tax on O&G products was stated as RM140 million higher than what was earned in 2019 and received in Sept 2020.
There are 3 areas of concern here that this article would like to touch on: 1) That the sales tax, projected at RM3.034 billion is the single largest contributor to the estimated revenue for 2021. 2) The budget surplus estimated at RM140 million and finally 3) The big ticket off-budget expenses that have since been mentioned.
Big Ticket Off-Budget Expense Items
1. The Batang Lupar Bridge
The earth breaking ceremony for this RM848 million project took place on the
23rd March 2021 and so we assumed that this project is really taking off.
2. The Spaoh STOLPort (aka Betong Airport)
It was reported on the 15th April 2021 that a few days earlier, the construction agreement document was handed over to the successful tender bidder for the project, D.A.L Keluarga Realty Cara Raya JV Sdn Bhd. The project value mentioned was as RM108.1 million.
3. The Sabah Sarawak Link Road (SSLR)
It was reported that Letter of Intention (LoI) had been issued to the contractor on July 7, 2020 and the Letter of Acceptance (LoA) would be issued to the contractor once the contractor fulfilled all the terms and conditions set in the tender document. The value of the project is not mentioned but during the watch of the PH government, the project was valued at RM1.2 billion.
4. The Covid-19 Vaccines
In Feb 2021, it was reported that the Sarawak government has approved an
allocation of RM30 million to buy Covid-19 vaccines.
These 4 items alone which comes close to RM2 billion will wipe the estimated surplus of RM140 million, leaving Sarawak with a budget deficit of close to RM1.9 billion. Why has this become a matter of such grave concern?
Within the last 14 days or so, the prime minister, a minister in the PM Department and the finance minister have all said that Malaysia is facing a serious financial problem. In order for the government to buy enough Covid-19 vaccines to vaccinate enough Malaysians so as to achieve herd immunity the government was forced to use RM5 billion from the National Trust Fund - KWAN. All these points to one very important point: Sarawak will not be in pole position when it comes to any money from Petronas.
Allocations from the federal budget 2021 are also beginning to look very doubtful.
The question that must be asked now concerns the Sarawak’s reserve, once said to be in the region of RM31 billion. There was never an official statement from the Chief Minister regarding this reserve. Assuming that such a reserve exist, Sarawakians would like to know in what forms is this reserve held and where. If there is a time when transparency with government finances is most urgently needed, it is now. Sarawakians want to know if Sarawak can survive this difficult period with minimum help from the Malayan-run federal government in Putrajaya.
