Friday, 19 October 2012

HISTORIC PR SABAH BUDGET 2013






Oleh : CHAN FOONG HIN

YESTERDAY was a historic day for Pakatan Rakyat in Sabah. We unveiled the first ever Sabah Alternative Budget entitled “People’s Economy, Reinstating Sabah’s Glory” (Merakyatkan Ekonomi, Kebangkitan Sabah).

It is a historic day because for the first time in the state’s history, the people of Sabah will be able to compare and contrast the official state budget, which will be tabled in the state assembly on Friday, 19th of October, 2012 with an alternative budget.

We are confident that the people of Sabah will find PR Sabah’s budget to be much more appealing compared with BN’s budget. Not only will the people of Sabah benefit directly from PR Sabah’s budget in the short run, they and future generations will also reap the rewards of the long term expenditure plans and initiatives which have been put forth by us.

The cornerstone of this budget is to outline how PR Sabah will spend the additional money the state will receive from the increase in oil royalties from 5% to 20%, as promised in Buku Jingga as well as the recently announced PR Budget 2013 at the federal level, as well as additional funds arising from savings due to reduction in corruption. PR Sabah envisions additional revenues of RM2.7b arising from the increase in oil royalties and another RM800m in savings from corruption.

In addition, PR Sabah will also reallocate RM1.1b of spending from the combined budgets of the Ministry of Finance and the Chief Minister Department, which have expanded significantly since 2008 under the control of a Chief Minister who is currently beset with corruption scandal after corruption scandal.

In this budget, we outline how this RM4.6b will be spent in a manner which will catapult Sabah to a new growth trajectory that is more inclusive and sustainable. This will be achieved via Five Thrusts: (i) Making Our Land Work (ii) Raising Disposable Incomes (iii) Social Outreach for All (iv) Enabling & Empowering Local Communities and (v) Improving Our Connectivity
PR Sabah promises to eradicate hardcore poverty in 5 years and to reduce idle, unproductive land to a bare minimum. PR aims to achieve this by embarking on an ambitious land reform and development scheme that will benefit individual landowners and smallholders rather than the big plantation companies which have made use of the land in Sabah without uplifting the quality of life of most Sabahans. 

PR Sabah will seek the return of 306,000 acres of land given to FELDA in 1979 under the BERJAYA government which not been allocated to smallholders as promised. We will also set aside RM50m to establish a Sabah Land Tribunal to resolve Natives Customary Rights (NCR) land disputes which currently covers 440,000 acres affecting 32,000 families.

Once these land disputes have been resolve, RM350m will be used to assist these land-owners to make their lands agriculturally productive including projects to build and widen irrigation channels, allocations for land-clearing machines, tools and fertilisers as well as the development of post-harvest facilities such as processing, packing and marketing for higher value added products to absorb the outputs from these agricultural activities.

We will provide the proper incentives for smallholders to practice integrated farming which includes coca, avocadoes, tapioca and rubber in order to diversify Sabah’s agricultural base and not be overly dependent on oil palm.

At the end of five years, we expect the smallholders to be earning between RM3000 to RM4000 a month, enough to lift them out of the vicious poverty cycle.

PR Sabah believes that for far too long, the people of Sabah have not benefitted from the proceeds from the oil and gas sector. Indeed, even with the 2nd highest state budget in Malaysia and with growing revenue from oil royalties, the majority of the poor which makes up 19.7% of all households in the state do not benefit directly from any assistance from the state government.

In recognition of this, PR Sabah is proposing a number of social outreach programs, many of which have been successfully implemented in other PR states such as Penang and Selangor, to directly benefit the people of Sabah, especially among the poor.

PR Sabah is proposing a minimum wage contribution of RM60 a month to all employees earning below RM1100 a month. This is in line with PR’s RM1100 minimum wage promise.

This contribution recognizes that SMEs in Sabah will take time to adjust to this minimum wage, which is only slightly higher than the Poverty Line Income of RM1048 a month in 2009. This contribution will be given for 5 years at the end of which employers would be expected to increase all salaries to RM1100 per month.

In addition, PR Sabah will also introduce a Skim Bantuan Makanan (20kg rice and 1 gas cylinder per family), a Skim Galakan Pendidikan (RM240 per year for one child living in rural areas), a Tabung Anak Sabah (RM200 for new born babies) and a Skim Mesra Usia (RM200 for senior citizens above 60 years of age).

These social outreach programs, which are mostly aimed at the poor, will increase the wage of a poor household with 2 senior citizen parents, a new born baby and with a single income earner earning RM800 a month will see his or her income increased to almost RM1000 a month.

Together with other social outreach programs including assistance for hospital visits for those from the rural areas and one-time grants for children starting tertiary education and for the families of senior citizens who have passed away, poor households may see their monthly income increase to over RM1400 a month.

Lest we are accused of proposing a purely populist budget with the intention of buying votes using future promised handouts, PR Sabah is committing 2/3rds or almost RM3b of the proposed increased and reallocated expenditure of RM4.6b to development expenditure.

A significant proportion of this will be channeled towards Improving Connectivity in the state, which is Thrust Five of PR Sabah’s budget. Apart from committing more resources into road building, especially in the rural areas, PR Sabah is committed to finding new and sustainable ways of improving electricity and water access in the state including funding for the E-FIT system for renewable energy which is currently being ignored by the state government and setting up local water supplies systems that does not require expensive pipes and big treatment plants to be built.

The detailed spending plans and strategies outlined in PR Sabah’s budget is a vast improvement on past BN budgets which have been opaque and not transparent, to say the least. For example, the Ministry of Finance’s allocation skyrocketed from RM737m in 2008 to RM1.94b in 2012, a 263% increase. During the same time period, the overall budget increased from RM2.3b in 2008 to RM4.1b in 2012, which is only a 76% increase.

More worryingly, some of the increased allocations have occurred in items which are lacking in transparency. For example, one single item under the budget estimates for the Ministry of Finance entitled ‘Special Expenditure’ or ‘Perbelanjaan Khas’ came up to RM1.13b, or more than one quarter of the total 2012 Sabah state budget.

There were no explanatory notes as to what this item consisted of. What is more worrying is that this ‘Special Expenditure’ amounted to only RM654m just two years prior, in 2010!

In contrast, PR Sabah’s budget very responsibly lists out the major spending items including programs which will put money directly into the pockets of those who need it the most meaning the poor and the marginalized in society.

Space limitations do not permit a lengthier explanation of the other positive aspects of PR Sabah’s budget. But suffice to say, we feel that it is a vast improvement to BN’s offerings in the past as well as what the BN can offer in the future.

The spending priorities of PR Sabah are a reflection of the overall strategies of PR state government in Sabah over the next five years when additional oil royalties under the increased 20% allocation are handed over by the federal government.

Together with a federal PR government, a PR Sabah state government will fundamentally transform governance as well as economic development in the state to lead Sabahans to a new era of inclusive and sustainable growth that will benefit all its residents.

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