Tuesday July 24, 2012

Present formula for budget allocation good only for peninsula

By STEPHEN THEN
stephenthen@thestar.com.my

MIRI: The Finance Ministry has been urged to draw up a better and more accurate formula for calculating budget allocations for Sarawak and Sabah.

Energy, Green Technology and Water Datuk Seri Peter Chin said the present one used was not reflective of the actual financial needs of the two states.

“The current formula is more in line with the situation of the people living in the states in Peninsular Malaysia but not in Sarawak and Sabah,” he said.

Chin, who is also SUPP president and Miri MP, said he had actually raised the issue with the Prime Minister and the Finance Ministry.

“What is happening now is that the Finance Ministry calculates the proposed amount of budget needed for a particular area for certain purposes based on the needs of the per capita.

“For example, the budget allocations for the provisions of basic amenities like water, electricity and roads are calculated based on the per capita needs in relation to, among others, population concentration and the number of settlements.

“This formula works well in the peninsula, that is why almost 98% of the whole of Peninsular Malaysia already have treated water supply, electricity and good roads.”

However, Chin in an interview, said the same formula and criteria could not be used in Sarawak and Sabah.

“The same formula when used to calculate the budget for Sarawak and Sabah will not be accurate on the actual needs,” he said, adding: “It would not be reflective of the actual financial situation to cater for the needs of the people in these two states.”

“In Sarawak and Sabah, the needs of the per capita cannot be the only factors used in determining budget allocation.

This is simply because the population density alone is spread over a very huge area and the settlements are usually very far apart.

“If in the peninsula, the amount of money needed to provide water for a particular settlement is RM10mil, the amount of money needed to provide the same amenity for the same settlement size in rural Sarawak may be at least three times that because the setting up the infrastructure in rural Sarawak is much more costly.”

Chin said if the Finance Ministry continued to allocate the amount of budget based on per capita needs, then Sarawak and Sabah would never have enough allocations to meet the basic needs.

The minister said the budget allocations for Sarawak and Sabah should be based on the needs of the per capita plus the overhead costs such as transportation and extra labour costs.

He said that in essence, the Finance Ministry needed to pro-vide a much bigger budget for the two states in almost every facet if ever the Federal Govern-ment were to achieve its objective of seeing Sarawak and Sabah catching up with the peninsula states in social amenities.

“Prime Minister Datuk Seri Najib Tun Razak is aware of this scenario.

“That is why he has, through the National Key Results Area initiative, allocated a lot of extra money for Sarawak and Sabah.

“Hopefully, the Economic Planning Unit will take into account more comprehensive data before deciding on the allocations for Sarawak and Sabah,” he said.

Asked on what his ministry would be seeking for from the coming Budget, he said he had submitted some proposals to Najib, who is Finance Minister 1, but the details could not be disclosed as yet until Najib had approved them.

Chin said the Barisan Nasional Backbenchers had also met with Second Finance Minister Datuk Seri Ahmad Husni Hanazlah to highlight their proposals for the Budget.

As for himself and the other Cabinet Ministers, he said they would have direct dialogue with Najib during their weekly Cabinet meeting.

News

Tuesday July 24, 2012

Present formula for budget allocation good only for peninsula

By STEPHEN THEN stephenthen@thestar.com.my

By STEPHEN THEN
stephenthen@thestar.com.my