Hajiji: No compromise on Sabah’s 40 pct net revenue special grant

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Hajiji said Sabah has been committed and consistent in seeking more from the federal government than ever before. — Bernama photo

KOTA KINABALU (May 17): The Sabah government has categorically confirmed that it will never give up the fundamental constitutional rights of the state in relation to the 40 per cent net revenue special grant under Article 112C and 112D of the Federal Constitution.

Chief Minister Datuk Seri Panglima Hajiji Noor said this fact was reinforced by Prime Minister Datuk Seri Anwar Ibrahim in his 2023 budget speech when the latter recognised and confirmed that the federal government is committed to improve the rate of the special grant compared to what was previously agreed and will expedite negotiations to find a solution.

He said this critical issue is now under the purview of the MA63 Technical Committee chaired by Deputy Prime Minister Dato Sri Fadillah Yusof.

“We will continue to defend the state of Sabah’s constitutional rights in relation to the existing revenue sharing formula and this must be respected by the federal government. This includes the state’s claim for the ‘lost years’, where there has been no review conducted from 1974 until recently.

“For now, there is an interim arrangement — on a without prejudice basis — where the state receives much more than before pending further negotiations between the state and federal government to claim what is rightfully due to the state of Sabah,” Hajiji said in a statement today.

He pointed out pending the ongoing negotiations, the interim amounts have increased from RM125.6
million in 2022 and from the RM260 million announced in January 2023 to RM300 million in July 2023.

Hajiji said while this falls short of what is expected, Sabah has been committed and consistent in seeking more from the federal government than ever before.

“In the meantime, let me be crystal clear, we respect the right of the Sabah Law Society (SLS) to commence legal proceedings on this matter.

“We recognise the important role that public interest litigation has in promoting the rule of law towards the fair and equitable administration of justice,” the Chief Minister stressed.

He said the state government sees the SLS’ initiative in a positive light that is not partisan and not political in the common furtherance of the constitutional arrangements when Sabah formed Malaysia in 1963.

“I do not want to prejudge the outcome of the Court of Appeal but I share the same sentiment as the rakyat
of Sabah and hope that any decision will be favourable to the state.

“I have already instructed the State Attorney General to scrutinise and review the ongoing legal proceedings and, if necessary, to correct any misguided statement that differs from the state’s clear and formal position.

“Notwithstanding the ongoing proceedings in the Court of Appeal – we maintain the official demand of the State Government of Sabah that the federal government is legally and constitutionally obligated to compensate the state of Sabah for what is lawfully due as a special grant, both historically and for the future,” he said.

Hajiji said Sabah’s right was negotiated prior to the formation of Malaysia and is enshrined in the Federal Constitution.

He said it is the financial entitlement of the state and this stand is very much more than an aspiration.

“If there is no agreement or solution between the state and the federal governments on the special grant, we will move to activate the constitutional provision to appoint an independent assessor to determine this issue and decide what the federal government is obligated to pay to Sabah,” said Hajiji.

“I assure the rakyat of Sabah that we will not stop in our relentless pursuit of all the state rights due under MA63 and the Federal Constitution. This is our uncompromising and absolute position,” he added.

On Thursday, the Court of Appeal adjourned its decision on the federal government’s appeal against the leave granted to the SLS to seek a judicial review regarding the state’s 40 per cent grant revenue.

Court of Appeal Judges Datuk Ravinthran N Paramaguru, Datuk Mohd Nazlan Mohd Ghazali, and Datuk Dr Choo Kah Sing fixed May 24 for case management to set the date for the decision after hearing submissions from all parties.

The federal government is appealing against the Kota Kinabalu High Court’s decision on Nov 11, 2022 to grant SLS leave to seek a judicial review regarding the matter to compel the return of 40 per cent of federal revenue earned from the state according to the Federal Constitution.

The court also granted the Sabah government’s application, represented by the counsel for the state government, Tengku Datuk Fuad Tengku Ahmad, to intervene in the appeal.

On Nov 11, 2022, Justice Ismail Brahim granted SLS’s application for leave for the judicial review ruling that SLS had locus standi for judicial review as it was a public interest litigation.

The AGC obtained a stay order to stop the High Court from hearing the merits of the case pending the appeal.

SLS filed the judicial review application in 2022\ to overturn the federal government’s gazette of an RM125.6 million annual grant for Sabah, claiming that it violated the state’s revenue rights under MA63.