The Democratic Action Party (DAP) proposed a RM1,000,000,000.00 (One Billion Ringgit) allocation in Budget 2023 as tax incentives and/or grants to encourage all kinds of businesses and industries, especially from the manufacturing sector, to relocate from any parts of Peninsula Malaysia to Sabah and Sarawak. The aim of such major allocation is to promote a more equitable regional economic and productivity growth in Sabah & Sarawak.
The proposal was included in the party’s memorandum on Budget 2023 submitted to the Ministry of Finance (MOF) on 13 September 2022.
If the proposal is taken up by the MOF, we would certainly foresee numerous businesses taking up such attractive tax cut and/or grants and relocate into Sabah & Sarawak, increasing the GDP rate, employment rate, and productivity rate in these two regions in East Malaysia. There will also be lesser incidence of labour transmigration and/or brain drain from those regions with locals being able to find good quality paying jobs nearer to home.
In addition to the above, the DAP proposes that another RM1,000,000,000.00 (One Billion Ringgit) be allocated in Budget 2023 to assist Sabah develop a state-wide power grid that will reduce the state’s frequent power disruption. A stable and comprehensive grid will also support large-scale industrialisation of the state.
Besides the proposal to encourage relocation of businesses into Sabah & Sarawak and develop power grid for industrialisation, the DAP also proposes that a RM30 million fund be allocated in Budget 2023 to encourage export of Sabah and Sarawak food produce and products to the Peninsula. Peninsular Malaysia is a perfect place to market Sabah and Sarawak produce. Through the fund, the government can incentivize local food industries to cater for the peninsular market, and through this, encouraging local businessmen to venture into export-oriented production.
Furthermore, the DAP had also proposed for healthcare capacities of both Sabah & Sarawak, especially that of rural ones, be bolstered by the Federal Government by allocating more developmental allocation in Budget 2023 for upgrading of healthcare facilities, adding beds for higher occupancy, boost transport capabilities, and increasing manpower and experts in rural clinics.
The DAP had also in the memorandum to MOF called upon the review of the revenue sharing model with Sabah as stated under Articles 112C & 112D of Federal Constitution. Whilst the amount announced by the Federal Government of RM125.6mil for Sabah for 2022-2026 is an increase from the RM26.7 million paid since the 1970s under Barisan Nasional rule, it not pursuant to the formula as provided for under the Constitution, which clearly states two-fifth or 40%. As there is a prevalent economic gap between Sabahans and the people of other states in the Peninsula, the 40% share of the federal revenue derived from Sabah should be returned to the state to pursue relevant programmes that will uplift the living standards of its people.
Last but not least, the DAP states that the development allocations in Budget 2023 allocated to Sabah & Sarawak has to make up at least 30% of total development budget allocated for the whole of Malaysia. Sabah & Sarawak deserves a higher share of development allocation as the two region’s development has been lagging behind compared to the states in the Peninsula Malaysia. Lack of revenue for infrastructure development has led to poverty in many parts of Sabah.