FINANCE Minister Lim Guan Eng’s admission that Putrajaya has no money to pay the 40% revenue rights due to Sabah does not mean Putrajaya can default on its payment, said experts on the Malaysia Agreement 1963 (MA63).

The federal government has not paid the 40% since 1974, although it is required to do so under MA63.

Michael Peter Govind said a review should be carried out in the event of a default of the agreement.

“An independent assessor should be jointly appointed by both governments to make the recommendations to substitute or modify the payments.

“The assessor should take into account not only the state’s needs but also Putrajaya’s financial position, and should aim to ensure that his recommendations will result in securing the state’s revenue and so on,” he told The Malaysian Insight.

According to him, Lim’s statement over the state’s revenue rights is an admission that Putrajaya recognises MA63 and therefore, is obligated to deliver its part of the agreement.

“The fact that Putrajaya admits that it is not able to pay the dues means that Sabah should take proactive measures to get its rights back,” he said.

Peter Govind proposed that the state collect its own taxes.

“The state government should raise this in the state assembly to see through the implementation of its taxes,“ he said.

MySabah legal adviser Tengku Fuad Ahmad said the federal government failed to do a review of its agreement after 1973, although it it was required to do it every five years under MA63 and Article 112D of the federal constitution.

He said that the sum payable to Sabah should be calculated on the basis of actual revenue derived from Sabah annually, but as of 1973, the amount received by Sabah until today is only around RM20 million.

Fuad said the federal government had used the same reason given by Lim to stop paying the 40% revenue rights, as in that “the federal government is not in the financial position to make the payment”.

“Only through a review can representatives from Sabah and the federal government decide whether there is a need to revise the special grant,” he said.

The special grant can be “modified, substituted, varied or abolished” with the consent of both Sabah and the federal government.

Institute Development of Studies chairman Simon Sipaun said Putrajaya should revise its priorities and postpone all projects that are not urgent so it can pay Sabah what it owes.

“We have been short-changed by the federal government for many years.

“It is very convenient for it to say now that it has no money and therefore cannot pay Sabah, but it continuously short-changed us back when it had money,” he said.

Sipaun said he was not convinced Putrajaya was not able to pay what it owes Sabah.

“Even at this point, Sabah is only getting a meagre RM5 billion while Sarawak is only getting RM4.3 billion, while a large portion of the budget is retained by the federal government.

“How can that be?” said Sipaun, adding that Putrajaya must see how developed peninsular Malaysia is right now compared with East Malaysia. – November 27, 2018.