Abg Jo proves his critics wrong with 2019 budget


By Nigel Edgar

KUCHING, Nov 24: Chief Minister Datuk Patinggi Abang Johari Tun Openg has taken a swipe at his critics on the recently passed 2019 state budget.

His critics had thought that the state government, in its efforts to gain support from the people in view of the next state election that is due in 2021 would go on a spending spree by announcing a lot of projects that would eat into the state’s reserves.

However, he surprised all of them by coming up with an extra source of revenue for the state and announced the biggest state budget in history while maintaining a surplus at the same time.

“Our budget for next year, as you know, is about RM11 billion, a record budget for Sarawak. Therefore, the expenditure directly from our revenue is about RM10 billion, and the balance of roughly RM2 billion is from alternative funding, particularly from the Development Bank of Sarawak (DBoS).


“But the RM10 billion comes from our own revenue, which is expected to be also about RM10.5 something billion while having a surplus budget of RM122 million.

“When I announced the budget, my opponents said ‘Abang Jo will eat up our reserves’. As you know, RM10 billion is a colossal sum, and, therefore, they thought that as we have good reserves, our revenue at the time normally around RM5 billion to RM7 billion, how am I going to get the extra money?

“Even one professor (political analyst) said the Gabungan Parti Sarawak (GPS) government would make use of the reserves to push up our economic development because of the pending election. I do not know when is the election because our term is still more than two years.

“Then they were surprised during the budget presentation. I introduced the sales tax of 5 per cent on our petroleum products, including crude oil. That gives us an additional RM3.5 billion into our coffer,” he said in his address during Sarawak Chambers of Commerce and Industry (SCCI) 67th anniversary dinner at a hotel here on Friday.

Abang Johari speaking at SCCI’s 67th anniversary dinner

Abang Johari said his critics did not anticipate that and turned to another way of criticising him by asking `why only now?’.

“One of them said why only now? Why didn’t the government impose it last time — to use that constitutional right that we have to impose a sales tax on commodities under Schedule 10 of our constitution? Why only now?

“My answer is simple: I was not the chief minister then. Somebody else was the chief minister. But now I’m the chief minister, I saw that right under Schedule 10. We have imposed on our palm oil, so why can’t we impose on our crude oil? Mana boleh Petronas saja, kita mesti ambil duit minyak (cannot be Petronas only, we must take (our) oil money),” he said.

Abang Johari explained that imposing the 5 per cent sales tax on petroleum-based products for export would generate an additional revenue of about RM3.5 billion, based on the assumption that crude oil is priced at US$60 per barrel.

He said as of today, the price of crude oil is at US$63 per barrel, and when the budget was planned, it was US$70 per barrel.

He believed that with the economic sanctions imposed on Iran and unrest in the Middle East, the price of crude oil would not drop below US$60 until the end of 2019.

However, if the crude oil price is higher than US$60 per barrel in the coming years, the state would actually be able to earn even more revenue, he added.

“So, our economic policies must be right, revenue must be right, you must try to find additional revenue. Thank God I managed to get this additional revenue to our state coffer. And with that revenue, we can increase our public spending and that will give growth to our economy, particularly construction.

“Construction will benefit from this, including the professionals, particularly the consultants, because we are going to build our water supply in the rural areas that will cost us RM2.8 billion, power supply to rural areas RM2.3 billion and the construction of roads and bridges. So within a period of three years, I am sure the business community will be very busy.

“You make money, I am happy,” he said.

In return, he said Sarawakians would be getting the benefits from this holistic economic development.

Abang Johari also revealed that the state might accumulate better reserves in the coming years through certain savings, provided that the state’s economic policies were to be crafted in a way that would produce growth.

“Then we do the basic infrastructure, including high-speed internet facilities, and that will be the ecosystem that we will use to attract investors to Sarawak. Therefore, it will be capital inflow as well as an increase in exports at the same time. We must upgrade our expertise.

“That’s where we have to have good education facilities to prepare our people. That one has been invested by my predecessor by establishing universities, including foreign universities in Sarawak like Curtin and Swinburne, and also invest in University College of Technology Sarawak in Sibu.

“Therefore, I believe that our future is clear-cut. We have the resources, the infrastructure that we are going to build, and we have the talent. And these will encompass all sectors in our economy, including entertainment. The future is bright upon all,” he reiterated.

Abang Johari revealed that the state government estimated that the state would record a growth of 5 per cent this year, and projected that it would continue to record growths of up to 7 per cent till the year 2022.

“It reminds me of China. When China emphasized infrastructure development, their growth was double digit — 10 to 11 per cent. And the success of China was because of infrastructure development that they undertook. Only after that did they go for high tech, including digital economy.

“That’s where Huawei and Tencent come in (China’s mobile and Internet companies), all these digital companies coming in, with their automobile industry also playing a very important role even in Malaysia, where we have automobiles assembled by a Chinese company (Geely) though the name is Proton,” he said. — DayakDaily