Has Sarawak always been shortchanged in National Budgets? We try and calculate.

We’re pretty sure you’ve already heard everything there is to hear about this year’s national budget, aka the #Belanjawan2020. But between the special treatment for some 40 year old bachelors and getting more pay when you flip the table on foreigners and steal their jobs, you might have missed a piece of drama.

Last Friday, it was reported that senior leaders from the Sarawak government and its ruling party GPS (Gabungan Parti Sarawak) may not be attending Budget 2020’s tabling later in the day, and some of the reasons given was that the state was not expecting to get much from Putrajaya.

According to the PBB (Parti Pesaka Bumiputera Bersatu) Wanita Chief Datuk Seri Fatimah Abdullah, the Pakatan Harapan government had failed to meet the promises they made during GE14 regarding state allocations for Sarawak.

“We do not see funds coming into the state. The best we can rely on is our own 2020 state budget that will be tabled in the state assembly soon,” – Datuk Seri Fatimah Abdullah, as reported by the Star.

Wah so drama wan! While it was reported later that Sarawakian MPs did attend the tabling due to their sense of responsibility, the earlier report did highlight a sore point between Putrajaya and Sarawak when it comes to budgets.

A few days prior, Sarawak’s Chief Minister Datuk Patinggi Abang Johari made a statement saying that GPS can develop Sarawak even without Putrajaya’s help. Earlier this year, there was quite a row when Sarawak tabled their biggest state budget ever, and Lim Guan Eng said that Sarawak will go bankrupt within three years at this rate.

Even after this year’s tabling, some Sarawakian leaders had expressed their discontent with the allocation for their state, with one calling the budget ‘Malaya-centric‘. So since it has been somewhat of a (short) tradition for Cilisos to play around with the national budget’s data…

…this year we’ll try to see if Sarawak has indeed been shortchanged. And the first thing to address is…

There’s a breakdown of money given to the states each year, but it’s probably not representative

For the purposes of this article, it would be nice to look at historical values to see if the root of the discontent is a recent thing, and thankfully the Treasury website keeps an archive of budget-related documents as far back as 2011.

We’ll be looking at allocations of funds to each of the state governments, which are detailed riiiiiight at the end of the budget documents, in Appendix E of each year. Wished we had looked there first, but anyways.

These pages record the actual funds/grants given out to each state the previous year, so the Budget 2020’s Appendix E will record 2018’s actual numbers. So we only have the budget data by state for up to 2018. Still, they include several categories of funds, and among them are:

• funds given out based on the number of people living in the state,
• funds given out to the states to do stuff like maintain roads, pay bills for streetlights and traffic lights, and other things,
• special funds given out yearly (only for Kedah, Selangor, Sabah and Sarawak),
• funds given out for state museums and libraries (since 2012)
• funds for items under the Concurrent List (items taken care of by both the State and Federal government)
  
• payment for nullification of import and excise duties on petroleum products (only for Sabah and Sarawak)
• and several more we’re too lazy to translate.

Typically, the contents of these documents make up between 2-3% of the total amount budgeted for each year, so they probably won’t have much to do with development funds allocated for each state, reflecting such a tiny portion of the actual budget. So why are we using these?

Well, for one thing, Lim Guan Eng used their figures from 2018 in this year’s Budget speech (point 117, pg 53) to sort of relate to this year’s development funds for Sabah and Sarawak. So if the Finance Minister can do that, we might as well.

“117. Besides that, in 2018, Sabah and Sarawak were the highest receivers of Federal Government Grants each as many as RM1.14 billion and RM1.3 billion. For 2020, Sabah and Sarawak remained as the states that receive the highest Development Funds with allocations of each as much as RM5.2 billion and RM4.4 billion…” – Part of Lim Guan Eng’s Budget 2020 speech, translated.

Also, outside these Appendix Es, we couldn’t find other forms of detailed allocation to each state, so this is probably as close as it gets. It might not be accurate in detailing the actual amounts each state gets in total from the budget, but it should give a rough idea. So without further ado… which state gets the most dough? Drumroll…

Sarawak and Sabah tops the list, even without their special allocations

So the first thing we did was tabulate the total for each state from 2008 to 2018, calculated how many per cent each state gets from the total that year, and asked Excel to draw us a graph. By the way, the links to all 11 Appendix Es are at the end of the article, if you’re interested in checking them out. Here’s what we got:

As you can see, the amounts given to Sarawak and Sabah had been significantly more than the other states since 2008, with Perlis, Malacca and Penang being at the bottom of the barrel.

So why are these funds distributed this way? Is it because of their sizes? The number of people in them? Or their population density? We know you probably didn’t ask all that, but we wanted to rank them and compare anyways.

So we calculated the average percentage that each state gets in the period and ranked them based on data we got from other places like land size and population of each state, and here’s the result:

So population density probably isn’t a factor in getting more funds. But population itself seems to be a factor. A component of these funds is the fund given out for the number of people living in the state, and Selangor got significantly more in that regard. Isolating just that fund and calculating their average gives us this graph:

With the exception of Sabah and Johor, the ranking matches their population, meaning that Selangor gets significantly more than the other states, which is probably what puts it in the top three biggest recipients despite its small size. Size might also be a factor, since there are grants given to maintain stuff like roads and streetlights. More land area, more things to maintain.

There might be another reason why the top three biggest receivers are at the top: they are recipients for special fundings. The first one is a special yearly grant given to Sabah, Sarawak, Selangor and Kedah.

Kedah receives varying amounts, but for Sarawak, Sabah and Selangor, a fixed amount of RM16 million, RM26.7 million and RM28.5 million respectively are given on an annual basis. This contributes to an average of 1.6%, 2.9% and 3.7% respectively to the total amount they receive each year.

The other thing was something called the payment for nullification of import and excise duties on petroleum products, of which Sabah and Sarawak receives RM120 million yearly, giving them an extra 12-13% to their yearly receipt. So what happens to the rankings when you remove these extra grants? Well…

Sarawak and Sabah still top the list, although their share of the pie has diminished somewhat. So based on the data from Appendix E and counting out factors like development funding and oil royalty rows notwithstanding, did Sarawak get sidelined or not? Well…

It probably depends on whether you see Sarawak as a state or as an entity within Malaysia

Obviously, looking at the data, it would seem that Sarawak is rolling in the dough more so than any other state in Malaysia. But what if you consider the Peninsular as a single entity?

As the pie charts demonstrated, there are two ways to look at it. If you look at it on a state-by-state basis, Sarawak and Sabah are clearly winners. But if you look at it in terms of Peninsula-Sabah-Sarawak, then it’s pretty clear that Sabah and Sarawak are getting a lot less than they should.

But if you look at the number of times Sabah and Sarawak were mentioned in each year’s budget speeches…

…it would seem that the Federal Government is trying to be more inclusive this year. They even announced a doubling in the yearly special grants for Sabah and Sarawak, to RM53.4 mil and RM32 mil respectively, and a further increase in the future, a thing not done since 1969.

Sabah and Sarawak were also reported to be the biggest recipients of development funds for 2020 (RM5.2 bil and RM4.4 bil), making up 17% of the nation’s total development expenditure.

While it sounds nice, after they attended the tabling, some Sarawak leaders have said that these improvements are nothing to shout about. According to Sarawak’s Tourism Minister Abdul Karim Rahman Hamzah,

“Sarawak is the largest state in Malaysia and granting it a mere RM32 million as special grant is just like feeding Sarawakians with crumbs. Also, based on the allocation for development given to Sarawak, we can forget about being on par with Malaya,” – Abdul Karim Rahman Hamzah, as reported by FMT.

Besides crumbs, the allocation to Sarawak has also been likened to peanuts, especially when compared to their income from their oil and gas as well as taxes. Following the backlash over the budget, Lim Guan Eng had… retaliated.

“I hope they will be considerate that the (previous) government has never given them so much before. Previously, they could be happy even though they did not receive much. Now that there are getting more, why are they not satisfied?” – Lim Guan Eng, as reported by FMT.

With that, we can hear a season 2 for this drama regarding Lim Guan Eng and Sarawak, so stay tuned for Budget 2021, we guess. Or the next Sarawak state budget tabling.

List of links to the Appendix Es:

[2008] [2009] [2010] [2011] [2012] [2013] [2014] [2015] [2016] [2017] [2018]