Chief minister Hajiji Noor said the budget, themed “Economic Recovery, People’s Prosperity”, is based on the state government’s commitment to revive Sabah’s economy, impacted by the pandemic as well as to enhance the people’s prosperity.

This will also contribute towards the success of the Sabah Maju Jaya development plan roadmap.

To achieve the goal of this budget theme, Hajiji said the state government was proposing an estimated expenditure of RM4.596 billion and estimated revenue collection of RM4.707 billion.

“This is a surplus budget of RM110.68 million,” he said, when tabling the budget at the state legislative assembly today.

“As crude palm oil and crude petroleum oil commodities are the main contributors to the state revenue, the government needs to be prudent and take a conservative approach in preparing the 2022 revenue estimates to ensure the government’s financial position remains strong.

“This is because the prices of these commodities are dependent on global economic conditions and market risks, which are beyond our control.”

Hajiji said tax revenue would contribute the bulk share of the revenue collection next year, with 44.5% or RM2.094 billion.

Non-tax revenue, he said, is expected to contribute RM2.138 billion or 45.4%, adding the state is also expected to receive RM475.02 million in the non-revenue receipts category.

“The current high price of crude oil will contribute to the increase in royalty expected to be received next year. This will make petroleum royalty the largest contributor, with a total of RM1.2 billion or 25.5%.

“This is followed by sales tax on petroleum products with a collection of RM1.1 billion or 23.4%, and sales tax on crude palm oil of RM810 million or 17.2%,” Hajiji said.

Apart from petroleum royalty, the other major revenue sources include interest on cash balances and short-term deposits (RM150 million); land premiums (RM146 million); forest produce royalty and export royalty on timber products (RM113.26 million); and dividends (RM104 million).

Hajiji added the government is grateful that the 2021 revised revenue estimates are expected to have an increase of 9.6% or RM430.67 million when compared with the original revenue estimate.

“This means that 2021 will create new history for Sabah, with the highest ever state revenue estimates, totalling RM4.912 billion,” he said.

The increase is due to the average price of crude palm oil and crude petroleum oil being higher than earlier forecast as well as state sales tax payment for oil and gas products.

As for next year’s supply expenditure, Hajiji said besides spending on emoluments, as well as recurring and special expenditures, the government was proposing RM1.368 billion for development expenditure.

This amount includes the state government’s allocation of RM741.57 million and Putrajaya’s allocation of RM626.58 million.

He said the state would also allocate RM919.18 million for the development of the agriculture, industrial and tourism sectors next year.

The amount involves an increase of RM8.48 million compared with the allocation for 2021, which is RM910.7 million.

Hajiji said to better appreciate the outstanding contributions of women, the government was also allocating RM17.61 million to implement women’s development programmes.

For rural development, Hajiji said the government would focus on socio-economic upgrading programmes, basic infrastructure, and strengthening the role of the village development and security committee, with an allocation of RM210.66 million.

In recognition of the services of civil servants, he said the government had approved a half-month salary as bonus, with a minimum rate of RM1,000, to 20,271 state civil servants, including temporary, contract and daily wage workers. This will be paid next month.

In addition, the state will also fund preliminary work on the construction of affordable housing schemes for state civil servants.

“I hope that these incentives will inspire state civil servants to work harder to improve the quality of service to the people,” Hajiji said.

The state assembly will sit from Dec 6 to 9 to debate the budget.