Kuala lumpur: The federal government has reassured that the RM1.5 billion increase in Sabah's interim special grant will not impact the state's operating and development allocation ceiling under this year's federal budget.
According to BERNAMA News Agency, Deputy Finance Minister Liew Chin Tong clarified that the special grant increase, which was announced by Prime Minister Datuk Seri Anwar Ibrahim in May, will not affect the funding for development projects and basic facilities in Sabah. The federal government will maintain its focus on development expenditure in the state through various projects by federal ministries and departments, ensuring balanced development between Sabah and Peninsular Malaysia.
Liew made these remarks during the Special Chamber session at the Dewan Rakyat today, responding to a question from Isnaraissah Munirah Majilis (WARISAN-Kota Belud) regarding the increase in Sabah's Special Grant payment to RM1.5 billion, its payment procedures, and methods, as well as Article 112C of the Federal Constitution. He confirmed that Sabah's development allocation had increased from RM6.7 billion to RM6.9 billion this year, covering projects such as the Pan Borneo Highway, rural roads, rural electricity and water supply, and the construction and upgrading of hospitals, clinics, dilapidated schools, and police stations.
Additionally, Liew mentioned that the Federal Government would continue providing electricity supply subsidies to Sabah, despite the transfer of regulatory powers over electricity supply to the state government in 2024. The subsidy allocation for 2026 is expected to reach RM880 million. The allocation for rural water supply increased from RM103.5 million in 2025 to RM143 million this year, and cost-of-living assistance through the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) schemes for Sabah is estimated at RM1.2 billion.
On the payment of the new special grant, Liew stated that both the federal and Sabah state governments must adhere to the process and procedures under Article 112D of the Federal Constitution, similar to those implemented in 2022, 2023, and 2025. He emphasized that the federal government respects the principle of special grants to Sabah as provided under Article 112C, despite filing an appeal against some aspects of the Kota Kinabalu High Court's ruling on the matter.
Liew reiterated the government's commitment to ongoing negotiations with the Sabah state government to establish a new mechanism for determining the amount of special grants in the future, in accordance with Articles 112C and 112D of the Federal Constitution.