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 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 in Kuching 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 percent, compared with the estimated revenue of RM3.90 billion in 2011.

“The tax revenue is expected to be RM952 million, or 24 percent, while the non-tax revenue is expected to contribute about RM2.97 billion, or 73 percent, of the total expected revenue,” he said.

He said revenue from forestry was estimated to account for RM509 million, or 13 percent, 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).

RM122 million in federal grants

Federal grants and reimbursements and non-revenue receipts would account for RM122 million, or three percent, 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 percent 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 percent 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.

- Bernama