KUALA LUMPUR: Perikatan Nasional MPs from Kelantan and Terengganu have spoken out against the government’s plan under Budget 2023 to take a portion of the two states’ “wang ehsan” (compassionate money) to finance poverty eradication programmes.
This “wang ehsan” is paid by Putrajaya to the two state governments for petroleum produced off their coasts.
The previous finance minister, Tengku Zafrul Aziz, had explained that the two states are not paid oil royalties as petroleum production was being carried out outside the states’ waters.
Tabling Budget 2023 last month, prime minister and finance minister Anwar Ibrahim had said the government will allocate an undisclosed amount of the two states’ “wang ehsan” to help the poor.
At a press conference in Parliament today, Kota Bharu MP Takiyuddin Hassan claimed that this contradicted the stand of several members of the government on payment of oil royalties to Kelantan and Terengganu.
He claimed that Pakatan Harapan’s (PH) 2018 election manifesto pledged to pay oil-producing states a 20% annual royalty. Then prime minister Dr Mahathir Mohamad later said the royalty would be 20% of oil and gas profits, not revenue.
He also claimed that the national finance committee agreed in June 2018 to stop paying out “wang ehsan” and channel oil royalties directly to Terengganu and Kelantan instead.
Now, Takiyuddin said, the government was not even seeking to grant the two states their demand for 5% of oil and gas revenue.
“We demand that the federal government explain themselves over the matter,” the PAS secretary-general said.
He was joined at the press conference by the other PN MPs from Terengganu and Kelantan. In the 15th general election (GE15), PN swept all the 22 parliamentary seats up for grabs in the two east coast states.
Last week, economy minister Rafizi Ramli said the Territorial Sea Act stipulated that state governments were only entitled to oil royalties if oil was found within three nautical miles of their shores.
Previously, leaders from PAS-led Kelantan and Terengganu had repeatedly urged Putrajaya to pay oil royalties directly to the states, insisting they were entitled to it under a deal with Petronas signed in 1975.
In 2021, Petronas’ founding chairman, Tengku Razaleigh Hamzah, also said there was no such thing as the payment of “wang ehsan” as the agreement was for Petronas to pay the states 5% in cash payments in exchange for them vesting their hydrocarbon or oil and gas rights in the oil company.
‘PM dilly-dallying on equal funds for MPs’
Takiyuddin also accused Anwar of dilly-dallying on calls for all MPs to be given equal funds, saying there should be no need for the government to hold negotiations with the opposition beforehand.
“This is in line with PH’s GE15 manifesto. The (Ismail Sabri Yaakob) government gave equal funds to all without any conditions. It evenly allocated it to government and opposition MPs (from parties) who signed the memorandum of understanding.”
He was referring to the MoU signed by PH and Ismail in September 2021, where they agreed to work together to help bolster economic recovery and restore political stability while the government managed the Covid-19 pandemic.