Next Johor Govt can challenge Federal funding allocations through National Finance Council, says MP

THE next Johor state government will be constitutionally entitled to raise concerns over federal financial allocations through the National Finance Council, according to Pasir Gudang MP Hassan Abdul Karim, who said the Federal Constitution provides a clear legal mechanism for resolving disputes between Putrajaya and the states.

The lawyer and parliamentarian said any administration formed following the Johor state election on 11 July could formally refer the issue of federal grants to the council, where the Federal Government is legally obliged to engage in consultations.

"Under Article 109(1) of the Federal Constitution, the Federal Government shall, in respect of each financial year, make to every state a grant known as the capitation grant in accordance with Part I of the Tenth Schedule.

"Under Article 110(1), every state shall receive all revenues from taxes, fees and other sources of revenue as provided under Part III of the Tenth Schedule," he said in a recent statement.

Hassan said the constitutional framework also provides a formal avenue for any state dissatisfied with the level of federal financial assistance to seek redress.

"The Federal Constitution provides legal provisions under which such matters may be referred to the National Finance Council.

"It is the duty of the Federal Government under Article 108(4) to consult the National Finance Council regarding grants made by the Federation to the states.

"Based on these existing written legal provisions, any Johor State Government formed after the Johor State Election on 11 July 2026 may bring the disputed issue of Federal Government grants to the State of Johor before the National Finance Council," he said.

The issue of federal allocations to Johor resurfaced after the Regent of Johor, Tunku Mahkota Ismail Sultan Ibrahim called on the Federal Government to return a more equitable share of the revenue collected from the state to enable Johor to accelerate development and better serve the welfare of its nearly five million residents.

The Regent said Johor contributes more than RM40 billion annually to the Federal Government but receives only between RM2 billion and RM3 billion in return.

He made the remarks during a public engagement session in response to an earlier statement by Prime Minister Datuk Seri Anwar Ibrahim, who reportedly described Johor as a wealthy state that nevertheless faced issues of financial "leakages".

Hassan said the constitutional provisions governing fiscal relations between the Federation and the states should serve as the appropriate framework for addressing any disagreement over revenue distribution, ensuring that such matters are resolved through established legal and institutional channels rather than political debate. - June 21, 2026