SABAH's interim allocation increased to RM1.5 billion this year, compared to RM600 million last year, announced Datuk Seri Anwar Ibrahim.
The Prime Minister said this was a short-term measure while waiting for negotiations and a mechanism to be finalised on the 40% entitlement payment amount.
He stressed that the Madani government is committed to implementing the 40% entitlement for Sabah, noting that there was no argument about the matter.
“We are committed to implementing the claim as stipulated in the Malaysia Agreement 1963 (MA63) and are currently detailing the method of implementation.
"The MADANI government has determined that the implementation of the 40 per cent right to Sabah is a policy that must be implemented.
“There is no longer any debate on whether it should be implemented or not. What is being detailed is the mechanism and method of implementation," he said when opening the Sabah State Level Kaamatan Festival 2026 at Hongkod Koisaan, Kadazandusun Cultural Association (KDCA), in Penampang, today.
He said that negotiations between the Federal Government and the Sabah State Government were underway in detail because any decision regarding MA63 had implications for the relationship between the Federation and other states.
According to him, the government did not want to be seen as deliberately delaying the process, but rather wanted to ensure that every decision was made carefully and responsibly.
“The government can no longer use the excuse of financial constraints to delay the implementation of Sabah’s rights. The decision has been made, and all that remains is to finalise the implementation formula,” he said.
Earlier, the Deputy Chief Minister of Sabah, who is also the Chairman of the Main Committee for the Sabah State-Level Kaamatan Festival 2026, Datuk Seri Dr Joachim Gunsalam, said that the state government appreciated the Federal Government’s commitment to implementing Sabah’s rights under MA63.
However, Joachim hoped that the special grant rate based on 40 per cent of the Federal net revenue could be reviewed and increased starting this year to strengthen the state’s fiscal position and enable more people’s development projects, including improvements to water supply, roads and bridges, to be implemented.
Anwar said the interim move was made despite the government facing financial challenges due to global geopolitical uncertainties that have affected oil prices and the country's subsidy spending.
"This interim payment is not a final solution, but it shows the government's determination to fulfil its responsibilities to Sabah while the negotiation process is concluded in the near future," he said.
Anwar also stressed that the claim that Sabah was being marginalised by the Federal Government was inaccurate because various development allocations and expenditures continued to be channelled to the state.
He said the revenue collected from Sabah last year was estimated at around RM10 billion, but the total development allocations and expenditures channelled back to the state reached about RM17 billion.
"This does not mean that Sabah's rights can be denied, but the people need to look at the facts comprehensively. The government remains committed to implementing the 40 per cent rights, but at the same time various aid, subsidies and development projects continue to be channelled for the well-being of the people of this state," he said. – May 30, 2026
