KUCHING: Parti Sarawak Bersatu (PSB) president Dato Sri Wong Soon Koh believes that there is an urgent need for the Sarawak government to table a supplementary budget in the coming State Legislative Assembly sitting, in view of recent developments connected to the Covid-19 outbreak.
Wong pointed out the State Budget 2020 passed in November 2019, worth RM9.891 billion, had taken into account five per cent state sales tax imposed on petroleum products but it has yet to be paid by oil giant Petroliam Nasional Berhad (Petronas).
“Sarawak needs to re-examine the annual budget through tabling of supplementary budget to put things right,” Wong told a press conference at the party headquarters at Jalan Pending here.
He said the supplementary budget would also cover the RM1.15 billion ‘Sarawakku Sayang Special Assistance Package’ and RM16.4 million for essential food supply announced recently.
The State Legislative Assembly was initially scheduled to sit for 10 days this month but it was fixed for only a day on April 13 following the Covid-19 outbreak. The sitting was further postponed to April 16 after the Movement Control Order was extended to April 14.
With oil price hovering around USD$20 per barrel currently, Wong said the cash compensation from the oil and gas resources extracted in the state was expected to be drastically lower.
“Usually the oil price is about USD$50 to USD$60 per barrel, can you imagine the amount of reduction now? So, cash compensation for the state in lieu of the oil and gas rights is very much reduced,” he said.
He added that state revenue from crude palm oil and crude palm kernel oil would drop as oil palm plantations were not on a productive basis, while income from timber premium and forestry royalty was expected to be significantly lower.
Wong further said the challenging operating environment would affect the dividend and interest incomes for the state.
“A reduction in revenue, which is a tremendous amount, should necessitate a review of the state financial situation,” said Wong, who is the former Second Finance Minister.