Friday, 9 December 2011

Speech by: YB Jimmy Wong Sze Phin N.57 Sri Tanjung

Dewan Undangan Negeri Ke 13
Mesyuarat Ke 3
Penggal Ke 4
18 Nov 2011- 24 Nov 2011
Pembentangan Bajet 2012

Speech by:
YB Jimmy Wong Sze Phin N.57 Sri Tanjung

Tuan speaker,

Terima kasih Tuan speaker kerana memberi saya peluang untuk membahas ucapan bajet 2012 Sabah yang telah dibentang oleh Menteri Kewangan pada hari Jumaat 18 November 2011 di Dewan yang mulia ini.

Tuan speaker saya minta akan  bahas ucapan saya dalam Bahasa English.

First of all I would like to thank the Minister of Finance who is also Chief Minister of Sabah for under item 65 of his Budget speech recognizes the existence of the opposition. I am only sadden that he did not see the positive role of the opposition in the development of the State through its checking and reminders to the ruling BN government of its obligation and responsibility to “walk the talk” as per in his annual budget speeches. The opposition especially DAP knows what is diamond and what is glass and we also know what is a stone and what is a jewel. When the Minister ends his “pantun”, bukan BN siapa lagi. We all know the answer is DAP and Pakatan Rakyat.

Tuan Speaker,

In the 2008 Water Audit report, Sabah did not comply with the water management standard. The people have the right to have access of clean water, literally. This is what the 2008 Water Audit had stated. The raw water quality is bad.  The water treatment plant Sabah is not equipped with tools, labs and qualified personnel. Fluoridation is insufficient. Tank or pond cleaning in water treatment plant is not properly done and plan. There is no proper water sampling station while the Sabah Quality Assurance Program is unsatisfactory. Has the government addressed and rectified all these problems?

Sabahans are paying a very high price of the God-given commodity which is RM0.90 for every 1,000 liter / 1m3 (1 cubic meter). Sabah has the highest water tariff compared to other States in Malaysia. For example, Perlis is charging 38 cent per 1m3, Perak 30 cent per 1m3 and the lowest water tariff in Malaysia is in Pulau Pinang which is 22 cents per 1m3. Of course, the charges are accordance to usage. But, Sabah water tariff is 90 cent per 1 m3. The flat rate is not fair to the poor people and the water is not even clean.
Allow me to discuss further on the water tariff rate.

Water Tariff  Rate for Domestic/Household use:

1. Sabah                                  -RM0.90          For every 1m3 (cubic meter) flat rate

2. Pahang                                -RM0.37          (From 0 to 18m3)
-RM0.79          (18.1-45m3)
-RM45             (above 45m3)

3. Perlis                                   -RM0.40          (0-15m3)
-RM0.70          (15.1-40m3)
-RM1.10          (>40m3)

4. Sarawak 
Kuching                                  -RM0.48          (0-15m3)
-RM0.72          (15-50m3)
-RM0.75          (>50m3)

Sibu                                         -RM0.46          (1-15m3)
-RM0.72          (15-50m3)
-RM0.76          (>50m3)

Bintulu                                    -RM0.61          (0-14m3)
-RM0.66          (14-45m3)

Miri/Limbang/Sarikei/Kapit    -RM0.46          (0-14m3)
-RM0.72          (14-45m3)
-RM0.76          (>45m3)

5. Perak                                   -RM0.30          (0-10m3)
-RM0.70          (11-20m3)
-RM1.03          (>20m3)

6. Pulau Pinang                       -RM0.22          (1-20m3)
-RM0.40          (20-40m3)
-RM0.52          (40-60m3)
-RM0.90          (60-200m3)
-RM1.00          (>200m3)

7. Kedah                                 -RM0.40          (First 20m3)
-RM0.70          (21-40m3)
-RM0.90          (41-60m3)
-RM1.10          (>60m3)

8. Negeri Sembilan                  -RM0.55          (0- 20m3)
-RM0.85          (20-35m3)
-RM1.40          (>35m3)

9. Johor                                   -RM0.38          (0-15m3)
-RM1.31          (16-30m3)
-RM1.82          (31-45m3)
-RM2.20          (46-100m3)
-RM2.23          (>100m3)

10. Melaka                              -RM0.55          (0-15m3)
-RM0.85          (15-40m3)
-RM1.33          (>40m3)

11. Terengganu                       -RM0.42          (0-20m3)
-RM0.65          (20-40m3)
-RM0.90          (40-60m3)
-RM1.00          (>60m3)

12. Selangor                            -RM0.57          (0- 20m3) under Pakatan Rakyat it is now free
-RM1.03          (21-35m3)
-RM2.00          (>35m3)

Tuan Speaker,

The 33-page budget speech and the tabling of the RM4.048.28 billion budget made headlines. However beneath the beautifully constructed words and sentences lies many discrepancies and mis-match.

Small Development Allocation

I am surprise that the Finance Minister talked about the five Asean economies of Indonesia, Malaysia, Philippines, Thailand and Vietnam. He has left out Brunei and Singapore. Singapore should be the focus of the Sabah government as even without much natural resources it is able to attain an average quarterly GDP growth of 6.36%. Sabah may even want to compare with the economy of tiny Penang and Selangor which when under the care of Pakatan Rakyat have been managed with surplus budget. Even with a budget of less than RM2 billion, these two States have made great stride in terms of economic and physical development. These two States use more than 60% of their budget on development compared to Sabah at about 20%.

The Malaysian economy is expected to grow between 5 – 5.5% in 2011. The Sabah economy is expected to grow between 3 – 4%. The slow rate of growth in Sabah is an indication of a bad economic management when it has abundant natural resources. Sabah will be very dependent on the domestic sector for growth. The high cost of import is affecting the economic growth of Sabah and we all know that the Cabotage policy is one of the culprits. Is the private sector willing to invest in such environment? Therefore, relying on the domestic sector is not a sound decision.

Deficit Budget

There is nothing to shout about as far the Sabah Budget 2012 is concerned. It is a deficit budget. In 2011, the estimated revenue was RM2,747.94 millions which was revised to RM3,820.45 millions, an increase of 39% or RM1,072.51 millions. The 2011 budget was RM3,068.66 millions and a supplementary budget for RM1,395.00 millions bringing it to RM4,463.66 millions. This represented a deficit of RM643.21 millions. The same can be said for the 2012 budget. The revenue is expected to be RM3,690.53 millions over a budget for RM4,048.28 millions. This is another deficit budget for RM357.75 millions.

When YAB talked about the RM3 billion State reserves and more than RM4 billion revenue, you are talking about a situation in 2010. Your using this figure to justify your 2012 budget is not appropriate.

As a comparison, Singapore's households are at their wealthiest, boosted by rising property prices, a report released by the Monetary Authority of Singapore (MAS) said. Singapore's households are at their wealthiest, boosted by rising property prices, a report released by the Monetary Authority of Singapore (MAS) stated on Friday. Household wealth stood at a record high of $1.471 trillion in the three months to September, up 8.6 per cent from $1.354 trillion in the same period in 2010, said the central bank. Property made up about 50.2 per cent of the household assets, while cash, Central Provident Fund balances, stocks and shares, as well as insurance, formed the other half of households' assets. Companies and banks were also in the pink of health, with good profits, a strong base of funding and healthy balance sheets.

Auditor General Report 2010

The Auditor-General’s report for 2010 did mention the satisfactory performance of the State in relation to financial management. What the Finance Minister is not telling is the fact that the government failed to collect unpaid revenue amounting for RM496.91 millions and unpaid repayment of loans from State Agencies to a tune of RM1.07 billions. This is a huge amount. Has the government collected this unpaid revenue?

RAM Rating

The Finance Minister is trying to paint a rosy picture of the financial position of the government by mentioning the RAM Rating services Berhad which rates the government of Sabah a triple A (AAA). This rating is only meant for the RM544 millions bond issued by the government on 9th December 2009. In a press statement RAM rating service has also clearly stated that Sabah has the highest unemployment rate and poverty. These facts were conveniently omitted by the Finance Minister in his budget speech.  

AG’s 2010 Report also reveal that some projects in are not worth what the government is paying for. The most alarming find in the Auditor-General’s Report is the failure by several local councils in Sabah to submit their accounts for auditing. Something fishy is definitely going on. Corruption, misuse of public funds, wastage of taxpayers’ money and abuse of powers are happening under our noses. And this is the true face of the BN government.

Government Debt

The Auditor General has reported that the Sabah government debt has increased in 2010 because of the issuance of this RM544 millions bond. The government debt in 2010 was RM3,104.25 millions. The debt has been increasing since 2006. I ask what is the Sabah government debt for 2011? While Penang has reduced her State debt by 95% in just three years under Pakatan Rakyat, the BN Sabah government is doing the exact opposite.

I have studied the Auditor General report 2010 for Sabah further and I saw many matters that the Finance Minister has not touched. The Sabah government managed to spend 94.4% or RM6.02 billion of the RM6.37 billion provided in the 9th Malaysia plan, many of the 34,485 projects were in poor standard and cannot be used. All this is a waste of the public funds. What I am stating below is just the tip of the iceberg.

Computer Laboratories

The Auditor-General report revealed that only two out of 300 computer laboratories for Sabah schools have been constructed since the government began its RM160.73 million project in April 2008.

Sabah recorded the highest number of computer lab construction projects as well as costs, followed by Sarawak (RM49 million), Johor (RM10.88 million) and Selangor (RM11.95 million.)
The report added Sabah was the only state with unfinished computer labs, and that other states had long since completed the construction of the facilities in schools.

“The computer lab project in Sabah has failed to reach its objective because the contractor failed to prepare and deliver the project following the stipulated time frame,” the Auditor-General’s Report said. The contract was awarded to TimeCom Holdings Sdn Bhd on June 15, 2007, and was scheduled to have been completed by April 30, 2008.

The report said the delay in the construction of labs has cost the government RM3.17 million in “liquidated and ascertained damages.” What is the state government going to do about it?

School Shoes, stationeries and Milks

Auditor General’s (AG) 2010 Report also revealed that most schools failed in distributing uniforms, shoes, stationeries and milks to school children in the Sabah. There’s no proper monitoring system and this causes wastage. It’s a waste of public fund. Most schools don’t have proper storage facility to store milk which in turn will cause spoilage and again wastage.

Books in State Libraries

AG’s Report also shows that several state libraries had not received books which were paid for. The expensive mobile library buses are not working, books are not categorized and ICT facilities which was promised has not implemented.

Tawau Parking Space

The Audited reports in Tawau district among others revealed the council had failed to address the shortage of parking space despite widespread anger over the issue.
Tawau Sewerage Plant

The report also identified the failure of the second phase of Tawau sewerage treatment plant and pump station which were completed in 2008, simply because no provisions were made to supply electricity to the facility.

Semporna wooden bridges

In Semporna, wooden bridges and walkways are not properly repaired and can pose danger to the public.

State Education Department Projects

Several projects carried out under the State Education Department such as the building of teachers’ quarters and repair of classrooms and several other facilities were found to be of low standards. The AG’s report also noted that some projects even lacked in basic plans.

Lahad Datu Tractor and Toilet

In one case, a agriculture tractor purchased for the Lahad Datu district council at the cost of RM83,839 in 2009 that had never been used and Lahad Datu public toilets build with the  cost of RM196,900, cannot be use.


The government purchased two helicopters from Eurocopter on 10 Dis 2009 at a cost of RM 33.8 millions. Is this the market price? The two helicopters were found to be damaged and needed to be fixed. Since April 2011 the helicopters are kept in the Hanger and were seldom or never used. Why is the government buying scrape iron? Is this effective administration? The cost of storage is rising by the day. I ask the government if the concept of “value for money” is applied by the Ministry?

Further, the seller of these helicopters did not come with training for the pilots. It is therefore not an acceptable excuse that the helicopters cannot be flown because the pilots are not trained and are not familiar with the helicopters. This is a mindboggling transaction. The objective of purchasing these expensive helicopters is for the Rakyat but it fails to serve the Rakyat.

Sabah Air has appointed two promotion agents. A total of RM163,580.00 was paid from 2008-2010. An extra payment of RM67,100.00 was made for purpose of mobilization/de-mobilization and standing charges are not spelled out in the agreement. Another extra payment for RM64,361.00 for Medical Emergency Evacuation Services (Medevac) should not be included as it is part of the terms and conditions.

This helicopters fiasco is serious where the Rakyat money is spent recklessly. What is the Ministry doing about this?

Negotiated Tender

In Sabah, the government awards contracts through direct negotiation with the contractors thus they have fat profits because of no competitive Open tendering and also no middlemen. On the surface it looks" clean" but the big question the people asks is when politicians gives contracts how many projects go to their  own companies without tendering? In other cases the tenders are ridiculous and appear to be from one company. This matter has been raised concerning the awards of contracts by the Sabah Rural development projects.

Over-Priced Projects

I am appalled that 49 of the 129 projects announced for Sabah were awarded at exorbitant prices. None of the projects went through a tender board.

An Example: "the rural power supply project for the connection of power grid No 1 (for 2011- 2012) which was awarded at a price of RM 41,736,809.77. The lowest price was only RM 7,775,000(15 times or 1500% higher than the normal price!

Clean Certificate

I like to ask the BN State Chief Minister and Finance Minister what is he so proud to have a “clean certificate”  when more than one million Sabahans do not have access to good road to their villages, no clean pipe water , no electricity or continuous supply of power? Even the urban areas also suffer from shortage of power and water and very bad roads.

You as Finance Minister gave a big broad smile when you mentioned about having a “clean certificate”. I again ask why you should be smiling when it was given by the Auditor General who has also made so many negative remarks on your administration. Why do young Sabahans leave their shore in search of better pasture in other States and countries? An efficient government should be able to translate better employment or business opportunities so that our youth don't need to migrate elsewhere.

New Oil Wells

Interestingly, Petronas has just made a "significant" oil find offshore of Sabah via the Wakid-1 well in Block 2G-2j. Preliminary estimates put the well reserves at 227 million barrels of oil equivalent.  The projected three different reservoirs yielded a maximum production rate of 8200 barrels per day (bpd). Petronas  Carigali is the sole equity holder of the production sharing contract for the block. I would like to ask the minister of finance. What did Sabah gain from this and where and how much is Sabah share?

Tuan Speaker,

The Finance Minister is trying to hoodwink the people (including BN leaders) about the ISO certificate from Moody International. To me this is a waste of money. The Audit General office should suffice as far as auditing the management of the State budget.

According to the Finance Minister, the objective of the 2012 budget is to stimulate the State economic growth with emphasis on improvement of basic infrastructure and public utilities for the benefit of the people and investors.

Election Budget

The government is very generous when disbursing funds for their State Assemblymen. With RM1.5 million the BN Assemblymen will without feeling guilty, use this allocation to fish for votes. This is a glaring move by the government which has elements of corruption. It is therefore not wrong to say that this 2012 budget is deemed to be an election budget.

While we wait for the impact of this budget on the infrastructure and public amenities, we can see that the budget shows no effort to fight inflation, expensive housing and low income which are extremely important for the present and future generations of Sabahans. Like all previous BN budgets, it is sedate, unexciting and worse, there is very little for the average and less fortunate Sabahans.

Emolument and Recurrent Expenditure

Emolument and Recurrent Expenditure drastically increase from RM768 million to 1,787.6 million or 332.75% since 2001. Its look like the BN government is only good at creating extraordinary expenses than creating real economic return in the past 10 years. The high emolument for RM623.66 millions is very high compare to Sarawak (RM400+ millions) and Malacca (RM40+ millions). To add insult to injury, Sarawak and Malacca have much higher GDP per capita than Sabah. The high emolument shows the bad management of human resources.

Infrastructure expenditure

How much is the government spent on basic infrastructure such water, electricity and roads. Can the government list down the detail of the money spent on these three areas and compare it with last year achievement in the same matter.

Narrow Base Revenue

The Sabah revenue base is very narrow. We are largely dependent on palm oil and petroleum of which the government has limited or no control. The tourism sector does show great potential as a revenue earner but with the many fatal accidents involving our visitors the sector will face a negative review which will affect visitors. The AirAsia and MAS merger is only going to strengthen monopolistic business, and the people will suffer from this arrangement. The expected more expensive airfares will also affect tourism. Broadening this economic base is required but it does not seem to happen under the BN government.


The Sabah government is certainly encouraging gambling. Gambling is a multi-million ringgit industry and is one source of revenue of the government. I would like to know how this revenue from gambling is distributed or spent by the government.

Tiny Federal Allocation

I am also saddened to see that Sabah only received a tiny RM1,520.76 Federal allocation. The Prime Minister has revealed a RM232 billions national budget 2012. What Sabah is getting back from the Federal government is so insignificant. I call on the government to ask for an increment in the oil royalty from 5% to at least 20% or more.

Allocation for Non-Islamic Institutions

In 1998, the budget presented by Datuk Ghapur Salleh is 1,727.35 million. Forest Sector contributed RM611.80 or 35% of the total state revenue. 20 million is allocated for assistance it non-muslim religious organizations and 8 million is made available as grant to private school. I hope that the government can allocate about 30 million to the non-muslim religious organizations and private school in Sabah for the year 2012. In the 20 point agreement, there is no official religion in Sabah but it seems that only Islam is getting all the fund and other religion is neglected.

Road Maintenance

Sabah road is badly maintained. May I know which company is responsible for the maintenance? Who is monitoring the road condition and how frequent is the monitoring? How much did the government spend on road maintenance and repair this year? I am asking because its a lousy workmanship and yet the people are still paying for the bad service. This is unbelievable and unfair to the people of Sabah.

Social welfare aids

Old folks aid is only given to either the husband or the wife in every household. This is not fair and aid should be given to each individual above 60 years old. The said aid should also increase to RM 500 per person due to the high cost of living.  I propose that the government gives RM200 ang pau or bonus to senior citizen over 60 years old and above, regardless of race or religion. Old folks, disabled, single mother entitle to RM500 each.

Tuan Speaker,

One-Man show

The State budgets have an unhealthy trend. It appears that only the Finance Minister-cum-Chief Minister is controlling more than 58% of the total budget which is RM2,350.65 millions. The other State Ministers have very little to manage. Out of this RM2,350.65 millions only 5.18% or RM209.52 millions is for development. Thus, the CM and Finance Minister controls so much of the money and yet so little for development. This means that there is a lot of fixed cost (not for development) within the government. I agree with some quarters that the rotational Chief Minister post should be re-instated so that all the major races in Sabah can benefit.
The World Bank states that Sabah is the poorest state in Malaysia and Sarawak is the second poorest in the Malaysia. Sabah and Sarawak is rich in natural resources.

Constraints in Agriculture Development and Poverty

The international Fund for Agriculture Development Report 2011 explains that the improper rural road system is a major factor preventing rural smallholders from participating in marketing their agricultural which is a contributing factor responsible for their poverty. Based on the statistics of the state economic planning unit, the Director General disclosed that indigenous communities in Sabah and Sarawak are the poorest communities in Malaysia. Yet, both states are the poorest in Malaysia.

The Sabah and Sarawak indigenous groups are the poorest amongst other in Malaysia. Is this something we are proud of? The answer is surely, NO. The Sabah government should be ashamed by the statement and is accounted for their failure.

The world bank reported on 2010 that the majority (40%)  of the total hard core poor in Malaysia were from the Rungus in Kudat and Matongong .If one pays a visit to any rural Rungus long houses or those who live in Pitas, Sapulut, Pensiangan, Sook, Tongod, Kuala Penyu, menumbok, Nabawan and Pagalungan in Keningau.

One can see their sad living conditions of dilapidated walls, roof and flooring. These sections of the communities still live from hand to mouth and put up in houses that are on the verge of collapsing. These people find it difficult;

(1)        To have proper food
(2)        Afford adequate clothing and
(3)        Bring their family out of the poverty line.

The state imports registered higher growth of 13.2% in the first half of this year mainly due to higher import cost of food (such as chicken and chicken wing, price jumps from RM9 to RM14.50 - RM15.50) and Fuel.

Tuan Speaker,

Pakatan Rakyat States of Penang and Selangor have shown how good governance and corruption-free environment can transform the States from a deficit-managed States to one that are surplus-managed States.  This is done in just under three years after assuming power. Sabah needs a Pakatan Rakyat government to steer it back to the right track so that all Sabahan can truly benefit from the development of Sabah and enjoy all her resources.

Tuan Speaker,

Saya mohon tidak menyokong bajet 2012 Negeri Sabah yang dicadang dan dibentangkan  oleh Menteri Kewangan kerana dengan Bajet tersebut objektifnya tidak akan tercapai.

YB Jimmy Wong