PARLIAMENT | Prime Minister Anwar Ibrahim rejected claims that Putrajaya distributes funds unfairly among states, saying federal allocations to most peninsula states exceed the revenue they contribute.
He told the Dewan Rakyat that his administration provided the highest allocations, compared to contributions received, to the opposition-led states of Kedah, Terengganu, and Kelantan.
Responding to a question from Doris Sophia Brodi (GPS-Sri Aman) on claims that federal allocations to states were unfair and insufficient, Anwar labelled such accusations as “baseless”.
“We defend this decision based on urgent needs, as I have listed several projects including poverty eradication, upgrades, infrastructure facilities, schools, and so on, especially for the poor and marginalised communities,” he said during the Prime Minister’s Question Time this morning.
He noted that the exceptions to this were Selangor and Penang.
“Due to their strategic locations, (the federal government) received high revenue (from them) but federal allocations (to those states) were much less,” he said.
Recently, Johor Regent Tunku Ismail Sultan Ibrahim argued that his state contributes substantial revenue to the federal government but receives only a small share in return.
Anwar later met Tunku Ismail “in a cordial and harmonious atmosphere”, saying the meeting was a good opportunity for them to exchange views and discuss matters concerning the welfare of the people, particularly in Johor.
Similarly, in October last year, Penang Chief Minister Chow Kon Yeow urged the federal government to review the distribution of revenue and called for an agreement to be signed on the issue.
This was after his memorandum proposing a special commission to review the revenue-sharing model between the federal and state governments was rejected.
Chow also raised the matter in June last year, when he said Penang was “shortchanged” despite being a top contributor to national coffers.
State contributions versus federal allocations
Commenting further, Anwar listed the average contributions of peninsula states to the federal government and the allocations returned to them from 2023 to 2025:
Selangor contributed RM43.6 billion, received RM15 billion
Johor contributed RM14 billion, received RM16 billion
Penang contributed RM10.7 billion, received RM7.9 billion
Kedah contributed RM3.7 billion, received RM9.5 billion
Terengganu contributed RM2.4 billion (including RM1.2 billion from petroleum royalties), received RM7.8 billion
Kelantan contributed RM946 million, received RM8.9 billion
Perlis contributed RM419 million, received RM2.2 billion
Anwar noted the amount Johor received was higher than what Selangor received.
He also said there has been a significant increase after 2023 where the federal government has returned revenue to states in amounts higher than what was received from them.
“This has become a trend, even though there are complaints from Selangor and Penang.
“But it happens that there are many people and industries in Selangor, and the income tax for people from other states is paid in Selangor,” he said.
Sabah grant, Sarawak talks
As for Sabah, Anwar said its interim special grant was higher as per the negotiations with the state over the Malaysia Agreement 1963 (MA63); however, he did not reveal exact figures.
Last year, during the Sabah election, Anwar said Putrajaya allocated RM17 billion compared to RM10 billion collected from the state.
Sabahans have argued that Putrajaya had breached its constitutional duty to pay Sabah 40 percent of federal revenue collected from the state.
Last month, Bernama reported Anwar saying that this year’s interim special grant for Sabah has been increased to RM1.5 billion from RM600 million last year.
Meanwhile, in the parliamentary sitting today, he said negotiations for Sarawak’s federal allocations are ongoing. - Mkini
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