Chief Minister Pehin Sri Abdul Taib Mahmud, who is Finance Minister I, said this is based on an estimated revenue of RM4.04 billion against an expenditure of RM3.96 billion.
He told the State Legislative Assembly sitting yesterday that the projected revenue for next year is 4 per cent or RM139 million more than the estimate for this year.
Now out of that RM3.96 billion in expenditure, 70 per cent will go to development expenditure, while the rest will be for operating expenditure. This is in contrast to the national Budget 2012, which allocated RM181.6 billion for operating expenditure and RM51.2 billion for development expenditure.
“We need to spend within our means to ensure we have sufficient financial reserves to meet future challenges. It is also important to continue with a balance or surplus budget policy to ensure the state’s financial positions remain strong and sustainable in the long run,” Pehin Sri Taib is quoted as saying.
The measures taken, he said, would ensure that the State had the fiscal flexibility to weather any economic eventualities.
The budget sees an allocation of RM266 million or 9 per cent of the total development budget to rural development, agriculture and land development sector while the balance of RM217 million or 7 per cent will go to the expansion and upgrading of various public utilities and water supplies in both rural and urban areas.
Sarawak’s economy is also projected to grow by 5 per cent next year. This is based on strong domestic demand and economic activities generated by on-going 10th Malaysia Plan and Sarawak Corridor of Renewal Energy (SCORE) projects.
So while many parts of the world are projecting doom and gloom for next year, it would seem that Sarawak is on the right track.
The report from The Borneo Post:
RM 79mln surplus budget
By Saiful Bahari
KUCHING: The state’s Budget 2012 is expected to yield a surplus of RM79 million, based on an estimated revenue of RM4.04 billion against RM3.96 billion in expenditure.
Pehin Sri Abdul Taib Mahmud, who tabled the budget proposal at the State Legislative Assembly yesterday, said the projected revenue for 2012 was RM139 million, or four per cent, more than the estimate for this year.
“We need to spend within our means to ensure we have sufficient financial reserves to meet future challenges. It is also important to continue with a balance or surplus budget policy to ensure the state’s financial positions remain strong and sustainable in the long run.”
The measures taken, he added, would ensure that the state had the fiscal flexibility to weather any economic eventualities.
Revenue from tax is expected to be at RM952 million, comprising revenue from forestry at RM509 million, sales tax at RM317 million, and the balance of RM126 million from water royalty, mining royalty and land rent.
Taib explained that the non-tax revenue, which is expected to contribute around RM2.97 billion, or 73 per cent of the total expected revenue, would come from compensation in lieu of the oil and gas rights compensation (RM1.51 billion), import and excise duties on petroleum products (RM120 million), land premium (RM290 million), dividend income (RM581 million), interest income (RM290 million) and revenue from fees, licences, permits, sales of properties, water sales and rental on government properties (RM179 million).
On ordinary expenditure for 2012, the chief minister said a sum of RM3.96 billion would be allocated, and out of this RM2.55 billion would be as appropriation to the statutory funds (development funds account) to finance development projects.
“The balance of RM1.41 billion will be for operational or recurrent expenditure, which is five per cent higher compared to the estimates of RM1.34 billion for 2011.”
These include an allocation of RM506m million for personnel emoluments, RM489m million (supplies and services), RM363 million (grants and fixed payments), RM31 million (procurement of assets), and RM25 million (other operating expenses).
Taib explained that the development allocation proposal of RM3.26 billion would be spent on six focus areas.
“The commerce and industry sector will receive RM1.85 billion, or 57 per cent of the total proposed development budget, while infrastructure will receive RM309 million, or nine per cent of the total development budget.” Taib.
The other areas are general administration (RM335 million, or 10 per cent of the total budget), social and community development, such as housing, resettlement schemes, sports and recreational facilities and community welfare services (RM283 million, or nine per cent of the total budget).
“The budget distribution also sees an allocation of RM266 million or nine per cent of the total development budget to rural development, agriculture and land development sector while the balance of RM217 million or seven per cent will go to the expansion and upgrading of various public utilities and water supplies both for rural and urban.”
Taib said out of the RM3.26 billion allocation for development expenditure, RM3.13 billion would be funded by the state and RM133 million by the federal government through reimbursements and loans.
“However, projects funded directly by the federal government are not reflected in this state budget proposal but will be reflected partially in the overall public sector expenditure in the state.”
The Star’s report:
State proposes RM3.9bil budget
By Yu Ji
KUCHING: The Sarawak government has proposed a budget of RM3.964bil for next year — one of the biggest ever for the state — with exactly 70% of the sum allocated for development purposes and the remainder for operating expenditure.
More than a development biased budget, it will also be a surplus budget, yielding a projected RM79mil surplus, against an estimated total revenue of RM4.043bil.
Chief Minister and state Finance Minister Tan Sri Abdul Taib Mahmud, who tabled the Supply (2012) Bill, 2011 at the State Legislative Assembly complex here yesterday, also said the state economy should grow by 5% next year.
Taib said the growth estimate was supported by strong domestic demand and economic activities generated by on-going 10th Malaysia Plan and Sarawak Corridor of Renewal Energy (SCORE) projects.
The projected “healthy” growth figures were also strongly attributed to the surging economies of China and India, which are estimated to hit almost 10% growth in the year ahead.
Taib began his one-hour-20-minute tabling of the budget with cautious optimism. He told the august House that the world economy had weakened and confidence had fallen.
“The World Economic Outlook Report projected a moderate growth of just four per cent globally for this year. The growth in major advanced economies for 2012 is forecasted at just 1.9%,” he said.
The US, Japan and European Union were grappling with financial instability, he said, but then highlighted China’s economy would continue to surge at 9% next year, while India’s should record 7.8%.
Moving on to Sarawak’s 2012 outlook, the Finance Minister said growth would be underpinned by the sustained expansion of private demand and strong exports of commodities arising from high prices and favourable regional trade.
Private consumption, he noted, should hit a high of 7.3% growth next year, while private investment should expand by 8%.
The construction and plantations industry would expand the fastest, and with both spurring the job creation market by almost double digit percentage growths.
“The state government will ensure that all the projects under the 10th MP and those under Score will take off, implemented timely and smoothly. We recognise that the speed of implementation is crucial to cushion the impact of external economic slow-down,” Taib said.
Taib also said SCORE’s implementation would stimulate growth for the next 20 years, and provide a multiplier effect to the state economy.
Midway through his speech, Taib highlighted five keys to the planning of the budget. He said the upgrading of human resources and rural infrastructure would be focused on.
He also placed particular emphasis on “inducing the private sector as the main engine of growth”, which would lift the burden on the government’s role.
In closing, he noted the state’s projected biggest revenue sources were still oil and gas (RM1.5bil) and forestry (RM509mil).
Smaller sources are land premium collection (RM290mil) and import and excise duties compensations (RM120mil).
“A healthy level of reserve is essential to provide fiscal flexibility in time of economic difficulties. With our strong financial position, the state was able to ride through steadily over a series of global economic crises over the past decades.”
The Bernama report:
Sarawak Proposes Surplus Budget For 2012
KUCHING, Nov 14 (Bernama) — Sarawak’s proposed 2012 budget is expected to yield a surplus of RM79 million based on an estimated total revenue of RM4.04 billion against a total ordinary expenditure of RM3.96 billion, Chief Minister Tan Sri Abdul Taib Mahmud said.
He said it was important to continue with a balanced or surplus budget policy to ensure that the state’s financial position remained strong and sustainable in the long run as well as fiscal flexibility to weather any economic eventuality.
“We need to spend within our means to ensure we have sufficient financial reserves to meet future challenges,” Taib, who is also state finance minister, said when tabling the Supply (2012) Bill, 2011 during the Sarawak Legislative Assembly sitting here today.
Taib said it was imperative for Sarawak, as a developing state, to continue to have a budget that was development-biased — that gave priority to economic activities and productive sectors, such as commerce and industry, public utilities, transport and communications besides agriculture and land development.
On the projected revenue, he said, it represented an increase of RM139 million, or four per cent, compared with the estimated revenue of RM3.90 billion in 2011.
“The tax revenue is expected to be RM952 million, or 24 per cent, while the non-tax revenue is expected to contribute about RM2.97 billion, or 73 per cent, of the total expected revenue,” he said.
He said revenue from forestry was estimated to account for RM509 million, or 13 per cent, of the total tax revenue, with RM494 million derived from forest royalty, RM12 million from timber premium and the balance of RM3 million from planted forest royalty.
Taib said revenue from sales tax was expected to generate RM317 million, of which RM217 million was expected from crude palm oil while the remaining RM100 million from lottery.
“The balance of RM126 million is expected to come from water royalty, mining royalty and land rents,” he said.
Sources of non-tax revenue included compensation in lieu of oil and gas rights at RM1.51 billion; compensation in lieu of import and excise duties on petroleum products (RM120 million); land premium (RM290 million); dividend income (RM581 million); interest income (RM290 million); and, revenue from fees, licences, permits, sales of properties, water sales and rental on government properties (RM179 million).
Federal grants and reimbursements and non-revenue receipts would account for RM122 million, or three per cent, of the total expected revenue.
Taib said RM2.55 billion out of the total allocation proposed for next year’s ordinary expenditure would be as appropriation to the statutory funds (development funds account) to finance development projects.
The balance of RM1.41 billion, which would be for operational or recurrent expenditure, was about five per cent higher compared with the estimate of RM1.34 billion for 2011, he said.
It would include RM506 million for personnel emoluments, RM489 milion for supplies and services, RM363 million for grants and fixed payments for government agencies such as local authorites and statutory bodies, RM31 million for procurement of assets and RM25 million for other operating expenses.
On next year’s proposed development expenditure of RM3.26 billion, he said, RM3.13 billion would be funded by the state and RM133 million by the federal government through reimbursements and loans.
He said the development allocation was about 23 per cent of the state’s 10th Malaysia Plan’s approved ceiling of RM14 billion, which would be spent for development and the rakyat’s well-being.