Federal rule: What goes with the territory

A state can expect to lose revenue when a piece of it is taken over by the federal government, but that’s not all.

PETALING JAYA: While it may be right to say it is impossible to turn Penang into a federal territory (FT), as proposed by Federal Territories Minister Tengku Adnan Mansor, it is quite possible to carve a chunk out of the state for a change of government.

This will require consent not only from the Conference of Rulers but also the state’s legislative assembly. In the case of Penang, it will be a challenge for the Barisan Nasional-led federal government to get the consent of the DAP-dominated assembly.

But stars may one day align so that there is a fourth FT after Kuala Lumpur, Labuan and Putrajaya.

What will a state lose when it gives up part of its territory to the federal administration?

State rights include the right not only to certain revenues but also the right to make policies, but it is Parliament that makes policies for the FTs.

The revenues lost include those derived from lands, mines, forests, entertainment duty, court fees and collections by Islamic authorities.

But it’s not all about the money. A federal takeover of a territory means the state gives away historical monuments, archaeological sites and other places with heritage value that are within that territory. Penang is rich with these.

The federal government would take over the administration of Islamic matters and jurisdiction of town councils. The state would lose the right to decide on matters pertaining to land tenure and soil conservation. It would lose authority over permits and licences for mineral prospecting and agricultural pursuits. It would no longer have purview over markets, fairs and places that offer entertainment.

The people of the annexed area will lose a layer of public representation. They will no longer have state assemblymen.

Kuala Lumpur, the former state capital of Selangor, became Malaysia’s first federal territory in 1974. Because it was also the federal capital, the federal government feared a clash with the state should the opposition gain state power, which looked probable even then. In the 1969 election, the Alliance of Umno, MCA and MIC won only 14 of the 24 state seats in Selangor.

Labuan island, a part of Sabah until it was ceded in 1984, serves as an offshore financial centre, while Putrajaya – ceded by Selangor in February 2001 – is the administrative capital of the federal government. -FMT