[UPDATED] All states, including Perikatan-held ones, to receive higher allocations: Anwar

KUALA LUMPUR – All states including those currently under the Perikatan Nasional administration are set to receive increased allocations following the decision made by the National Finance Council today.

Prime Minister Datuk Seri Anwar Ibrahim, who chaired the meeting, said the federal government had agreed to increase its allocation to the respective state governments, namely the grants based on level of economic development, infrastructure, and well-being (Pemberian Tahap) to RM400 million.

“The meeting today also agreed to the review and improvements to indicators as well as the distribution of (Pemberian Tahap).

“This decision shows the commitment and seriousness of the federal government in providing opportunities for state governments to implement development projects according to the states’ priorities and so on.

“This would further strengthen the momentum towards economic recovery and contribute to the Malaysia Madani concept,” he said in a statement today.

Anwar said the meeting, which was also attended by menteris besar, chief ministers, and state representatives, also agreed to the revision and improvement of indicators as well as distribution for Pemberian Tahap.

As per the 2023 budget, Anwar also announced that NFC also agreed to increase the allocation for the Ecological Fiscal Transfer to RM150 million friom RM70 million in 2022. 

“This increase is a special encouragement to states that gazette new protected areas.”

The federal government, he said, agreed to improve the utilisation of allocations under the state road maintenance grant for roads and other related works involving gated and guarded housing areas, as well as the replacement of road and lane name signages.

Additionally, Anwar also recommended the state government to prioritise awarding road maintenance works at respective states to G1 to G4 class contractors instead of focusing on concessionaires.

“This measure aims to help the economic cycle of small contractors in a more fair manner 

and can indirectly stimulate the country’s economic growth.”

The federal government through the Finance Ministry, Anwar announced, also increased its allocation for periodic federal road maintenance to RM250 million.

This is mainly to deal with the problem of potholed roads which are among the contributors to accidents.

“The additional provision will also be dedicated to the benefit of small Bumiputera contractors,” he said.

“This makes the additional allocation for the overall periodic maintenance of the federal roads to RM1 billion compared to RM750 million announced in Budget 2023.”

Anwar also announced that the federal government through the Finance Ministry has agreed to consider and amend the method of disbursements for progressive payments involving new federal to state loans involving development projects under the Malaysia Rolling Plan.

“This approach can speed up the allocation process provided as a loan, helping state governments that have cash flow problems and depending on loan allocation for implement or launch development projects.”

The federal government, Anwar said, also agreed to extend a tax incentive package for investments into states for a transition period of 2 years until December 31, 2024 involving states such as Kelantan, Terengganu, Pahang, Johor and Sabah, in line with the government's desire to balancing development throughout the country through private sector investment activities.

“This is also an interim measure towards a more comprehensive application of the new incentive structure.

“The federal government is always committed to ensuring the relationship between the federal and state governments are at their best.

“This desire is manifested through increased allocations channelled in various forms of aid to the state governments respectively every year,” he added. – The Vibes, April 18, 2023