Hornbill Unleashed

July 31, 2018

‘5-plus-20’ formula for Sarawak

Filed under: Politics — Hornbill Unleashed @ 8:01 AM

The Pakatan Harapan (PH) federal government has altered its promise of 20 per cent oil and gas royalty to Sarawak, after the Sarawak government chose not to accept the condition set in their ‘New Deal Agreement’ prior to the 14th general election.

PH Sarawak chairman Chong Chieng Jen, who announced this to reporters outside Parliament in Kuala Lumpur yesterday, said while the oil and gas royalty will be retained at five per cent, the state will receive an additional 20 per cent in oil profits.

According to him, the promises of 20 per cent of oil and gas royalty to Sarawak and 50 per cent of tax revenue collected in Sarawak to be returned to the state come with an underlying condition, in that the Sarawak government must use the funds on education and healthcare development.

During the press conference, Chong distributed a statement jointly signed by him and PKR Sarawak chief Baru Bian, who is also Works Minister.

According to Chong, PH Sarawak in its GE14 manifesto promised that 20 per cent oil and gas royalty (an additional 15 per cent) plus 50 per cent of all tax revenue collected in Sarawak would be given to the Sarawak government, and the Sarawak government shall attain full autonomy in all education and healthcare matters in the state and undertake the financial obligations of these two ministries in the state.

It was also agreed in the manifesto that if the oil and gas companies cannot afford to pay the full 20 per cent royalty, the federal government will top up the shortfall as it is in line with PH Sarawak’s ‘State Autonomy Agenda’.

He also mentioned that the Sarawak government, however, had rejected the offer by PH Sarawak and conveniently highlighted the 20 per cent royalty while omitting the part concerning financial obligations and autonomy of education and healthcare.

“Given the Sarawak state government’s rejection of the offer, the federal government was compelled to renegotiate the whole matter and thus, the 20 per cent oil profit issue for Sarawak. It is the Sarawak state government who has brought upon themselves and Sarawakians in general the present predicament,” said Chong.

On the 20 per cent oil profits, he said Sarawakians can rest assured that it will not compromise the present five per cent royalty as the five per cent royalty is an agreement between Petronas and the Sarawak government, and cannot be varied unless the Sarawak government voluntarily gives it up.

Apart from that, he mentioned that the federal government was also concerned about direct cash payments to the Sarawak government, claiming that the Sarawak government does not practise transparent and good governance as evident by the government’s policies on land and timber.

He alleged that it has been proven that the Sarawak government’s policies on management of natural wealth only favour cronies while the general populace does not get a fair share of the wealth.

“As such, a cabinet committee was set up to discuss further on the matter – the quantum and mechanism to channel the funds to the people while minimising the risk of mismanagement by the Sarawak state government.

“Bottom line, the 20 per cent oil profits now offered will be further and additional to the present five per cent oil and gas royalties. This is a positive development and far better than the arrangement by Barisan Nasional whereby the five per cent royalties stayed stagnant for the past 45 years.

“We have been fighting all these years for the 20 per cent oil royalties. Finally, two months after the change of the (federal) government, there is at least an additional revenue to the state other than the five per cent oil royalties agreed by the (previous) BN government,” said Chong.

He also stated that PH Sarawak is hopeful that the Sarawak government will continue to discuss with the federal government on the matter as per the Petroleum Development Act (PDA) 1974, towards fairer sharing of Sarawak’s oil resources.

Source : The Borneo Post Online


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