SARAWAK will continue its development-biased and rural-focused budget to further stimulate economic progress, with a proposed RM11.9 billion for next year, the biggest sum in the history of the state.

Chief Minister Abang Johari Openg said that out of the total budget, an allocation of RM9.1 billion, including a federal fund of RM300 million, was proposed for development expenditure, with RM2.841 million for operating expenditure.

Abang Johari, who is also state finance and economic planning minister, said taking into account an estimated total revenue of RM10.5 billion and a total proposed ordinary expenditure of RM10.4 billion, the proposed 2019 budget was expected to generate a surplus of RM122 million.

“The state will continue its expansionary fiscal policy with six key strategies, tapping into a new major revenue stream, including a 5% sales tax on petroleum products effective January 1,” he said when tabling the Supply (2019) Bill at the Sarawak state assembly sitting today.

He said next year’s development expenditure estimates took into account high impact and people-centric projects, particularly in the rural areas; the commitment to complete ongoing projects; the capacity to implement projects, and expenditure re-prioritisation by the federal government to rationalise its fiscal position.

“For 2019, a sum of RM9.1 billion is proposed to finance various programmes and projects under the 11th Malaysia Plan, including socio-economic and rural transformation initiatives, walkabout projects, and initiatives under the digital economy,” Abang Johari said.

He said that of the total provision for development expenditure, RM8.8 billion would be funded by the state, while RM260 million is to be financed by the federal government through reimbursable loans and grants.

Abang Johari said that the sales tax levied on petroleum products – crude oil, natural gas, liquefied natural gas, chemical-based fertilisers, and gas to liquid products – was the state’s right as enshrined in the federal constitution.

On the federal budget, he said the allocation for Sarawak of RM4.346 billion was only 7.94% of the total development budget, compared with RM4.336 billion in 2018.

“The 2019 federal budget does not reflect a fair and equitable allocation to Sarawak despite the promise made by the state’s Pakatan Harapan to make sure that Sarawak and Sabah will get 30% of the federal allocation,” he said.

For 2018, a total allocation of RM8.2 billion was announced for the state budget, comprising RM5.745 billion for development expenditure and RM2.4816 for operating expenditure. – Bernama, November 5, 2018.