How will Sabah’s Special Grant change annually from 2023 to 2026?

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Sabah's Special Grant to See Annual Increases Until 2026

Sabah's annual Special Grant is set to increase significantly each year between 2023 and 2026, following an agreement between the federal and state governments. For 2023, the grant will rise to RM125.6 million, a substantial increase from the previous RM26.7 million. This revised amount reflects a 4.7-fold jump and is the result of extensive negotiations aimed at addressing a long-standing financial claim.
Scheduled Annual Increments

The agreement stipulates that the Special Grant amount will be adjusted annually according to an agreed-upon rate from 2023 through 2026. This structured increase is part of a broader framework to resolve financial matters between the federal and Sabah state governments, with the ultimate goal of reaching a new consensus on the annual grant. The specifics of these annual rate adjustments are based on ongoing discussions and data exchange between both governments.
Continued Negotiations on 40 Per Cent Claim

Alongside the immediate increase in the Special Grant, negotiations will continue regarding Sabah's claim for 40 per cent of the total income generated within the state. This claim is a separate, yet related, component of the financial discussions that aim to fully address Sabah's financial entitlements under the Federal Constitution, specifically Article 112D. The Joint Consultative Committee, which facilitated this agreement, will continue to work towards a consensus on this larger claim.
Potential for Earlier Consensus and Backdating

Should a consensus on the annual grant be reached before 2026, the newly agreed-upon amount would supersede the current payment schedule and could be implemented retroactively, potentially beginning with payments for 2022. This provision allows for a quicker resolution and implementation of a revised grant structure if both parties can finalise their discussions and agreements within the stipulated timeframe, taking into account the state's service costs.

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How will Sabah’s Special Grant change annually from 2023 to 2026?

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