The Federal Government’s expenditure for Sabah in 2026 is estimated to reach RM17 billion, far exceeding the estimated revenue collected from the state, which is around RM10 billion per year.
This situation simultaneously refutes the claim that the Federal Government is ‘sucking’ Sabah’s land revenue without taking into account the development and well-being of the people in the state.
Sabah Treasury Secretary-General, Datuk Johan Mahmood Merican, announced that the Federal Government’s expenditure for Sabah actually exceeds the amount of revenue collected.
He stressed that there is no issue arising about the Federal Government ‘sucking’ Sabah’s revenue without providing a commensurate development return.
Johan explained that the RM10 billion revenue also includes 5% of the petroleum revenue obtained by the Federal Government following oil production in the state.
Efforts to increase the participation of Sabah contractors in the oil and gas sector are also underway, where in 2024 alone, approximately RM2 billion worth of additional work was given to local contractors.
For the annual allocation, the amount has increased from RM13 billion in 2022 to RM14 billion for the years 2023 to 2024.
The 2025 and 2026 budgets allocate RM17 billion, which includes the operating costs of schools, hospitals, clinics, and police forces.
Nearly RM9 billion of the amount is allocated for the operating expenses of ministries and Federal agencies in Sabah.
In addition, the RM17 billion allocation includes a direct grant to the Sabah State Government of approximately RM1 billion for other expenditure purposes.
The amount does not include the special grant from the MADANI Government of RM600 million, as recently announced by Prime Minister Datuk Seri Anwar Ibrahim.
The Prime Minister also announced a development allocation of nearly RM7 billion or RM6.9 billion for the state of Sabah.
The development funds will be used for projects prioritized by the state government, including the construction of the Sabah Heart Centre at the Queen Elizabeth II Hospital and the Southern Link Transmission Line Project.
The MADANI government has also revived the Sabah Pan Borneo Highway project, which was previously stalled at an estimated cost of around RM14 billion.
An estimated RM1.3 billion will be channeled through the Rahmah Cash Contribution (STR) to 840,000 recipients in Sabah, in addition to the Rahmah Basic Contribution (SARA).
Meanwhile, fuel subsidies are still being continued by the Federal Government to Sabah Electricity Sdn Bhd (SESB), even though energy regulatory powers have been handed back to Sabah.
