Chief Minister’s winding up speech on the Sarawak 2020 Budget

KUCHING: Sarawak civil servants will receive a two-month bonus or a minimum of RM2,000. Chief Minister Datuk Patinggi Abang Johari Tun Openg said the Sarawak government recognised the contribution of civil servants in implementing the government’s policies and their service to the rakyat.

“I am happy to note that our civil service has been instrumental in ensuring that projects are well implemented and executed in a timely manner,” Abang Johari, who is also Finance and Economic Planning Minister, said in his winding up debate in the Sarawak State Assembly yesterday.

He said the bonus will be paid at the end of December.

Abang Johari also said the state civil service has been acknowledged as among the best in Malaysia.

On the state sales tax on petroleum products, he said his government will “take all necessary actions to ensure that all persons and entities liable to pay State Sales Tax will pay the amount of tax assessed on them.”

“This tax must be imposed as approved by this August House in November last year, and the State Sales Tax on petroleum products took effect from January 1, 2019,” he stressed

The chief minister said if Petronas failed to pay the state sales tax, legal action would be instituted to recover the unpaid tax.

Below is the full text of Abang Johari’s winding-up speech:

Bismillahirrahmanirrahim

Assalamualaikum Warahmatullahi Wabarakatuh.

Selamat Sejahtera dan Salam Ibu Pertiwiku.

Tuan Speaker,

Dalam ucapan penggulungan saya kali ini, saya tidak akan menyentuh beberapa perkara spesifik kerana seperti biasa perkara-perkara tersebut sudah disentuh oleh para Menteri-menteri yang berkenaan.  Walau bagaimanapun, saya akan memberi penerangan lebih lanjut mengenai isu-isu utama yang telah dibangkitkan oleh Ahli-Ahli Yang Berhormat.

Saya ingin mengambil kesempatan ini juga untuk mengucapkan setinggi penghargaan dan terima kasih kepada Ahli-ahli Yang Berhormat dalam Dewan yang mulia ini sama ada di pihak Kerajaan mahupun daripada pihak pembangkang kerana telah banyak menyumbang idea bagi kita membangunkan negeri Sarawak yang tercinta ini dan juga di atas sokongan mereka terhadap Bajet 2020. Kepada mereka, saya mengucapkan terima kasih.

Tuan Speaker,

I would like to take this opportunity to thank all Honourable Members who had participated in the debate on the Supply (2020) Bill, 2019 and would like to thank them for their valuable contributions and support that Sarawak is on the right track to become a high income economy come year 2030.

As I look back on the past three years, I am inspired by Sarawak’s progress and as the Chief Minister and the Minister for Finance and Economic Planning, I am more determined than ever to keep the Sarawak economy moving forward.

When I came into office in 2017, Sarawak posted a surplus of RM110.1 million in 2018 on a budget of RM8.2 billion, and for the year 2019, I proposed a budget of RM11.9 billion, the biggest to date, with an expected surplus of RM122 million focussing on rural development as a means to bridge the development gap between the urban and rural areas.

To be a developed economy, Sarawak must have sufficient and good infrastructure and public amenities that can support and attract private investment. Sarawak must have good communication and connectivity to be able to move forward in its development agenda. Together with talent development, these will lay the foundation for Sarawak to be on its way as a developed State come 2030.

The 2020 Budget is designed to create the investment environment and eco-system for private sector to invest, and crafted to suit a new era of development in which digital economy is our new focus. Essentially, this is the development strategy of the Sarawak Government for a better Sarawak in the future.

Tuan Speaker,

ALTERNATIVE FINANCING INITIATIVES

In order to be on par with other more developed states in Malaysia, Sarawak still has to build the much-needed physical infrastructure and amenities throughout the State. It is the responsibility of the Sarawak Government to invest in these infrastructure to fulfil its fundamental service delivery obligations. We also know that any development project require a considerable amount of funding for its implementation.

Due to the many competing demands for our financial resources, conventional financing model is no longer a viable option. We have to look for other financing models that can help achieve our development goals, particularly in the area of physical infrastructure and amenities.

We have to be creative; we have to develop new mechanism and even explore unchartered waters if necessary; thus this alternative financing initiative that I and my Cabinet colleagues are rigorously pursuing.

Honourable members of this august House should not hastily jump into conclusion that the alternative financing model the Sarawak Government adopted is similar to 1MDB, without fully understanding how it works and the benefits derived from it. It saddens me that ignorance of some Honourable members is blurring the good intention of the Government in solving the everyday problems faced by our rakyat.

Tuan Speaker,

For the information of this august House, to meet potential shortfall in the State budget without touching our reserve, the State can alternatively tap into funding provided by Development Bank of Sarawak (DBoS), a bank which is fully owned by Sarawak.

Securing financing facilities for long-dated financing from DBoS to finance socio-economically important projects such as water supply, power supply, roads and bridges as well as other sectors such as digital economy, tourism and convention infrastructure, oil and gas and agriculture, will provide the State with competitive rate, long tenure and limited recourse.

It is worthwhile to note that, like conventional loan repayment terms, the financing repayments to DBoS will be on staggered repayment terms spread over a periodic number of years, based on the duration of projects implementation, as opposed to lump-sum or bullet payment as some might think. The financial provisions for these progress payments will be provided for in our normal annual budget.

Nonetheless, DBoS has also put in place its risk governance and other policies in accordance with Bank Negara Malaysia (BNM) guidelines, regulations and standards for best practices. The bank’s prudential ratio such as Capital Adequacy Ratio is a ratio of a bank’s capital in relation to its weighted assets and current liabilities. In giving out financing, DBoS is strictly adhering to its Capital Adequacy Ratio that provides guidelines preventing DBoS from taking excess leverage and becoming insolvent when crisis arise. DBoS submits its financial report to BNM and Federal Ministry of Housing and Local Government on a yearly basis.

The broadening of the State’s present revenue base, with the provisions under the State and Federal Constitutions and relevant laws, would further strengthen the State’s financial capacity, and support the State in meeting its objective to achieve and sustain budget surplus in many years to come.

The State’s sound financial standing and stable socio-economic and political environment have earned us, our commendable investment credit ratings from reputable international credit rating houses.  With this, the State is able to position itself in the eyes of both international and domestic investors as a “choice” for direct and indirect investment destination.

I would like to emphasise here that, it is the policy of the Sarawak Government of not issuing any guarantee to its fund-raising exercise unlike that of Federal Government’s practice. As has been repeatedly mentioned in this august House (and I would like to highlight it here again) – alternative funding will only be sought by the State when in need and when there is a capacity to repay and most importantly, borrowing only for strategic and productive purposes and not for financing of operation expenditure.

Leveraging on alternative financing initiative is a sustainable platform to adopt to facilitate and expedite the realisation of the State development agenda under the 5-year Malaysia Plan. This will ultimately provide the growth impetus to achieve the status of high income and developed State by year 2030.

Thus, it is most regrettable to note that the Honourable Member for Kota Sentosa, a Sarawakian, a Deputy Minister in the Federal Cabinet representing the rakyat of Sarawak, had bluntly made misleading statement and allegations on the State’s sincere initiatives to obtain funding from other legitimate means, worst still describing it as a David Copperfield act. Perhaps reflecting his own character like David Copperfield acts.

It is totally unwarranted for the Honourable Member for Kota Sentosa to equate the State alternative financing initiative, which has been practised by many countries in the world including Malaysia, to that of 1MDB. The Honourable Member for Kota Sentosa should be well aware of the simple fact that 1MDB’s businesses and financial structures are clearly operated on a different platform and objective altogether. 1MDB is a corporation with the business model of buying and investing in strategic assets without having a strong balance sheet and cash flow, requiring guarantee from the Federal Government to support its huge borrowings activities.

If we are to apply this unsubstantiated argument of the Honourable Member for Kota Sentosa, then we can claim that Pakatan Harapan (PH) Government’s financing model is similar to 1MDB’s in the making because PH Government is using its Special Purpose Vehicles (SPVs), such as Dana Infra Nasional Berhad to finance its big and mega infrastructure projects. Also recently, the PH Government has issued a Samurai Bond of 200-billion-yen equivalent to RM8 billion.  The proceeds of this bond issuance are to be used for financing projects, which among others include building of schools, hospitals, roads and utilities.

I would recommend the Honourable Member for Kota Sentosa to refer to these two books by Brett King and another journal produced by The Hong Kong Institute of Bankers.

Tuan Speaker,

PETRONAS TO PAY UP THE SST

The Honourable Member for Kota Sentosa also alleged that the inclusion of revenue from State Sales Tax on petroleum products when such tax has yet to be collected from PETRONAS this year, is presumptuous budgeting.

Let me state categorically in this august House that the GPS Government will take all necessary actions to ensure that all persons and entities liable to pay State Sales Tax will pay the amount of tax assessed on them.

I have stated at the inaugural meeting of the Special Steering Committee on MA 63 in December last year, that the State’s constitutional rights to pass impose State Sales Tax is strictly non-negotiable. This tax must be imposed as approved by this August House in November last year, and the State Sales Tax on petroleum products took effect from 1st January, 2019.

PETRONAS must pay the State Sales Tax assessed by the Controller with effect from 1st January, 2019.  This has been unanimously passed by this august House in November 2018.

If PETRONAS wants a reduction of the rate of the tax, the shortfall must be compensated by the Federal Government through an arrangement with PETRONAS. This is to ensure that the revenue from State Sales Tax on petroleum received for this year and for subsequent years, will never fall below the sum estimated in our annual budget.

I must firmly reiterate that if PETRONAS does not pay the State Sales Tax already assessed on PETRONAS, legal action will be instituted to recover the unpaid tax.

Thus, the allegation that the Sarawak Government is running a presumptuous budget is clearly irresponsible, provocative and underestimated the State Government’s strong resolve to take all necessary actions to ensure that the State Sale Tax on petroleum products will yield the expected level of revenue.

Nevertheless, Sarawak is able to achieve fiscal sustainability as we adopted a multi-pronged approach in our budget exercise, as I have detailed in my budget presentation. We have other sources of revenue on stream, which will ensure a healthy and well-functioning economy, meaning we don’t rely solely on sales tax imposed on PETRONAS.

Tuan Speaker,

HYDROGEN ECONOMY INITIATIVES

GPS Government has taken bold steps to promote clean energy industry by exploring the hydrogen economy, diversifying from traditional energy sources that have repercussion on climate change. In communities across the world, hydrogen technology is now very well developed and proven to be safe.

Honourable members may note that, experts have expressed very favourable views on the future of hydrogen economy in Malaysia as expressed at the Academy of Sciences Malaysia (ASM) 12th General Assembly held on 27 April, 2019 in Kuala Lumpur. Here I wish to quote:

    1. (a) Malaysia’s energy policies, namely the Fuel Cell & Hydrogen Blueprint 2017, suggest that Malaysia is ready to embrace renewable resources as a way forward, by including the potential of fuel cell using hydrogen energy, to bring a clean, zero emission energy technology for a sustainable nation;
    2. (b) The PETRONAS’ Hydrogen Vision, view hydrogen as a decarbonisation solution, by managing carbon dioxide emission across its value chain, and view hydrogen as an enabler for potential business growth; and
    3. (c) Tenaga National Berhad’s Technology Roadmap 1 (TRM1), identified hydrogen as one of the enablers under Proactive Environmental Management Theme. TNB’s R&D also suggested that Hydrogen is an excellent energy carrier due to hydrogen having longer discharge duration and larger capacity compared to other energy storage and energy carrier technologies which is useful for applications in the heavy transportation and industrial sector.

On related development, according to South Korea government’s hydrogen road map released in January this year, the Korean hydrogen market is expected to reach 70 trillion won by 2050. Just last week, South Korea announced it will build three hydrogen-powered cities by 2022. The plan will see the cities use hydrogen as the fuel for cooling, heating, electricity and transportation.

Over the past months, I drove around town in a hydrogen fuel cell powered SUV by a South Korean manufacturer; so far it has been a smooth and quiet ride, and safe to handle.

Tuan Speaker,

Despite the advances in hydrogen technology across the world, we can and must do more. Rather than shirking from the challenge like the Honourable Member for Pending, we Sarawakians must foster the spirit of building a climate-smart economy of the future in order to protect our homeland, Sarawak Ibu Pertiwiku.

On our transition to a reliable, clean energy system, I approved RM20.3 million for an applied research grant on hydrogen economy initiative, as proof of our commitment to R&D funding which calls for a 21st Century Clean Transportation initiative. This would help modernise our urban infrastructure through new technologies such as fuel cell technology, hydrogen-powered vehicles and hydrogen powered Autonomous Rapid Transit (ART) which has zero carbon emission.

In this respect, we have allocated a preliminary sum of RM20 million through Sarawak SEDC to start this initiative.

This development, coupled with those in other cutting-edge technology sectors ranging from manufacturing to agriculture, will create new jobs, attract new high value added industries around us which can contribute positively to our labour revenue productivity.

Tuan Speaker,

PROJEK RAKYAT SARAWAK

Kerajaan Sarawak perlu mempercepatkan pembangunan kemudahan asas dan projek-projek strategik untuk rakyat kita.

Kerajaan negeri di bawah GPS melihat Projek Rakyat Sarawak, terutama projek-projek pembangunan luar bandar sebagai usaha yang sangat penting dan satu amanah yang perlu kita tunaikan kepada rakyat. Malangnya, Kerajaan Persekutuan tidak memberi keutamaan kepada projek-projek ini selepas mereka mengambil alih pemerintahan negara.

Mereka tidak mengutamakan projek untuk kesejahteraan rakyat. Oleh itu, Kerajaan Sarawak mengambil pendirian yang tegas (a bold decision) untuk membiayai sepenuhnya projek-projek tersebut. Contohnya, projek menghubungkan jalan-jalan pesisir pantai kita dengan kos RM5.0 bilion, projek bekalan air dengan kos RM2.8 billion, projek bekalan elektrik dengan kos RM2.37 billion.

Kerajaan Sarawak telah memperjuangkan hak rakyat supaya mereka tidak ketinggalan dalam arus pembangunan.

Saya sangat bersukacita kerana impak pelaksanaan Projek Rakyat telah mula dikecapi oleh rakyat Sarawak.  Beberapa kawasan yang dahulunya menghadapi masalah air yang kritikal kini telah mendapat bekalan air bersih dan terawat.

Beberapa kampung dan rumah panjang juga telah menikmati bekalan elektrik.  Kawasan terpencil juga telah berjaya dihubungkan dengan rangkaian jalan dan jambatan. Inilah cara kita melaksanakan pembangunan mengikut acuan Sarawak, demi rakyat Sarawak.

Tuan Speaker,

SARAWAK CIVIL SERVICE

The Sarawak Government recognised the support and contribution of the Sarawak Civil Service under the leadership of the Honourable State Secretary in implementing our policies, delivering development programmes and projects as well as public service to the rakyat.

I am happy to note that our Sarawak Civil Service has been instrumental in ensuring that projects are well implemented and executed in a timely manner.  It is no accident that Sarawak Civil Service has been acknowledged as among the best, if not the best in Malaysia.

There are, of course, rooms for improvement in our service delivery, and that the Sarawak Civil Service will need to rise higher to the ever increasing expectation of the people.

    1. (d) Due to the commitment and hard work of our Civil Servants, the Project Rakyat are mostly on track;
    2. (e) There has been tremendous improvement in the implementation of numerous Rural Transformation Projects (RTPs); and
    3. (f) Many business processes and procedures have been simplified for the benefit of the rakyat.

Their efforts in embracing quality culture have received numerous accolades and recognitions at both international and national levels.  We have received many benchmarking visits from other States in Peninsular Malaysia, on the various successful initiatives that the Sarawak Civil Service has pioneered and introduced.

Tuan Speaker,

CONCLUSION

The 2020 Budget which I have presented is a roadmap to a future that embodies Sarawakians values and aspirations: future of opportunities for all of our families; a rising standard of living; and a sustainable, peaceful Sarawak for the future generation.

This future is within our reach. But just as it took the collective efforts of all Sarawakians to rise and build an even stronger economy, it would also need all of us to work together to meet the challenges that lie ahead. It will not be easy. But I have never been more optimistic about Sarawak’s future than I am today.

I know that when we are united in the face of challenges, we will emerge stronger and better than before. I know that when we work together, there are no limits to what we can achieve. Together, we will move forward to innovate, to create opportunities, and to make Sarawak stronger than ever before.

Datuk Amar Speaker,

Allow me to inform this august House on members of my family that have been touched either with malice or otherwise by the Honourable Member for Pending and viraled by DAP social media.

I have two children, a son and a daughter. Abdillah my son received education on technology from Alexander College in Perth, Western Australia and Aviation Institute of Australia, Jandakot, Perth and a holder of the Australian Pilot Licence.

He started his start-ups Aizo Digital Works at Cyberjaya as developer of multi-layered online games and animation, and also providing design and programming internship to students of the Multi-Media University. His passion in Nintendo technology led him to set up Aizo Digital.

In February 2016, before I became Deputy Chief Minister and Chief Minister, he was requested by his lawyer friend who is the owner of Borneo Sea Offshore to be an independent director in his firm. Abdillah owns no share and has no fiduciary interest in the company. He retired as an independent director in June 2018.

Indeed, it is malicious and vexatious on the part of the Honourable Member for Pending to have created a negative perception of Abdillah who is not here to defend himself.

My daughter Norjehan is a holder of Bachelor of e-Commerce (Honours) from Curtin University, Perth, Australia. She graduated 15 years ago and used to work for Sarawak Energy and she is now working with a private firm in apps technology.

As a responsible parent I have given education to my children and let them pursue their professional careers and it is therefore, regrettable that the Honourable Member for Pending has resorted to character assassination on me and members of my family to gain political mileage.

Saya ingin menyatakan bahawa sebagai seorang Islam yang taat kepada ajaran agama kita sedar bahawa apa-apa yang kita ada dalam bentuk harta tidak akan dibawa ke kubur apabila kita dipanggil oleh Ilahi; cuma yang dibawa ialah amalan kita ketika hidup.

Rekod saya sebagai Ahli Dewan Undangan Negeri selama 38 tahun sejak tahun 1981, dan ahli pentadbiran negeri dan cabinet selama 34 tahun sejak 1984 adalah sebagai saksi kepada integriti yang ada pada saya dan keluarga. I fear no one, but I fear God.

Datuk Amar Speaker,

Kerajaan GPS amat prihatin dengan kebajikan pegawai Perkhidmatan Awam Negeri Sarawak khususnya dalam menghadapi bebanan kewangan akibat kos sara hidup yang semakin meningkat.

Oleh yang demikian, Kerajaan GPS telah memutuskan untuk memberi Bantuan Khas Kewangan bersamaan dua-bulan gaji pokok atau minimum RM2,000 kepada pegawai Perkhidmatan Awam Negeri Sarawak, dan dibayar sebelum peghujung tahun ini.

Akhir kata, saya mengambil kesempatan ini untuk mengucapkan terima kasih kepada Datuk Amar Speaker yang telah mengendalikan persidangan DUN dengan teratur dan cemerlang.

Ucapan terima kasih juga kepada semua petugas Dewan yang telah menjalankan tugas dengan penuh kesabaran dan cemerlang.

Sebelum mengakhiri ucapan, saya ingin mengucapkan Selamat Menyambut Hari Krismas 2019 dan juga Selamat Menyambut Tahun Baru 2020 kepada semua. Kita akan terus memberi keutamaan kepada Sarawak – Sarawak First.

I beg to move. Sekian, terima kasih.

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