State has RM3.3bil reserves

Kota Kinabalu: Chief Minister Datuk Seri Mohd Shafie Apdal (pic) said the State Treasury had reserves amounting to RM3.3 billion as of June 18, this year. However, the State Government's debt to the Federal Government stood at RM3.9b.Of the RM3.3b, some 48.7 per cent or RM1.6 billion is owned by the State Government for the Consolidated Revenue Account while 51.5 per cent or RM1.7 billion is held for the Consolidated Trust Account.

"The State Government's working capital is sufficient to cover the necessary daily payments," said Shafie, who is also State Finance Minister, in his ministry's winding up speech at the State Legislative Assembly sitting, Thursday.

"The Government's liability comprises RM2.9 billion of Federal Government loan and RM1 billion of issued bonds."

To date, he said, the State Government has no repayment arrears for the Federal Government loan.

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"The State Government is required to repay the issued bonds, which will mature on Dec 9, 2019, through bullet payment.

"The bonds repayment on the said date is one of the measures taken to reduce the State's debt," he said.

He added that the State Government allocated RM150.7 million each year for the purpose of the Federal Government loan's repayment.

"On average, the repayment period of the loan is 20 years with a low interest rate of zero per cent for social projects like water supply projects and sewerage projects and four per cent for commercial projects obtained from KKIP Sdn Bhd and Saham Sabah Bhd."

He said the State Government planned its annual budget by balancing the revenues with future expenditure.

"As far as possible, for a fiscal year, the State Government will plan expenditures which will not exceed the expected revenue which means the higher the projected revenue, the higher expenditure can be planned."

On the 40 per cent claim for the special grant for Sabah as demanded by Sabah pressure groups as valid under the Malaysia Agreement, Shafie assured that the State Government would continue to negotiate with the Federal Government.

"I was made to understand by my officials in the Finance Ministry that previously the Sabah Special Grant Review Committee had functioned as the platform for both governments to further discuss the matter.

"The State Government is studying the matter and if it is found suitable, the committee will be re-activated to enable discussions between both sides to be continued," he said.

Meanwhile, Shafie said it is essential for the establishment for the three new ministries – Health and People's Wellbeing Ministry, Education and Innovation Ministry, and the Native Laws and Affairs Ministry, albeit the fact that it will increase the expenditure of the State Government.

"As such, efforts will be taken to improve the revenue collection as well as the government's financial status, which will include the review on the special grant for Sabah as well as the increase of petroleum royalty from the current five per cent to at least 20 per cent."

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He also disclosed that the State Government will implement policies on filling up vacancies and control the number of positions in the public service with cautious.

"This is to ensure that the size of the State's public service is optimised and at the same time to control the emolument expenditure," he said. - Ricardo Unto

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