Former CM warns of Sabah financial crisis

Former chief minister Yong Teck Lee says Sabah is likely to face a deficit of RM806 million this year instead of the projected surplus of RM49 million.

KOTA KINABALU: Former Sabah chief minister Yong Teck Lee said the Sabah government is heading to financial bankruptcy because of the incompetent and political foolishness of the Warisan-led administration.

He said the financial problem faced by University College Sabah Foundation was just an indication of the financial woes the state government would experience in near future.

“The incompetence of the Sabah administration, the glaring failure to tackle the economic fallout of Covid-19 and the reckless plot of the government leaders’ attempt to topple Prime Minister Muhyiddin Yassin have created a perfect storm of economic crisis in Sabah.

“The Warisan-led Sabah government is also paralysed by the implosion of internal conflicts,” he said in a statement, adding that the rift within Pakatan Harapan over the prime minister candidate issue was breaking up the Warisan-PKR alliance in the state.

The SAPP president said Sabah’s revenue would fall short of the government’s financial commitments and the state is expected to experience a deficit of RM806 million because of the two Covid-19 packages launched on March 25 and June 18.

Sabah’s projected revenue stood at RM4,192 million against an expenditure of RM4,143 million, leaving a surplus of RM49 million under the 2020 state budget.

“All of Sabah’s main revenue sources are expected to fall. For instance, due to the double blow of lower production and lower prices, petroleum royalties are expected to fall from the budgeted sum of RM1,700 million to only RM1,100 million.

“Similarly, crude palm oil sales taxes are projected to fall from RM852 million to RM600 million, and due to stagnation in development, land revenues will fall to around RM200 million (from the projected RM300 million),” he said.

Yong said other items that would be affected include water revenues (down from RM305m to RM250m), gaming sales taxes (from RM60 million to RM30 million) and seafood export taxes (from RM10 million to zero).

The 50% share of the federal tourism tax would also be negligible, he added.

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