State Finance Assistant Minister Kenny Chua clarified that the State Government only has RM1.6089 billion to spend while debts from federal loans and bonds for projects amount to a whopping RM3.8 billion.
He said the State's financial position as of June 18, this year indicated that public funds totalled RM3.3054 billion and from that total, only 48.7 per cent or RM1.6089 billion belongs to the State Government for the Consolidated Revenue Account.
As for the remaining 51.3 per cent or RM1.6965 billion, Kenny said it is held in trust for the Consolidated Trust Account and therefore cannot be spent by the Government.
At the State Assembly sitting on Thursday, Luyang Assemblyman Phoong Jin Zhe had questioned Chief Minister Datuk Seri Shafie Apdal on the State Government's current financial position.
In his reply, Shafie said the State Government has no arrears in loan payments to the Federal Government and is looking into how to best settle the RM1 billion bond that is due to be paid in full when it matures on Dec 9, next year.
Shafie, who also holds the Finance Ministry portfolio, said the State government's liabilities consist of loans from the Federal Government which total RM2.871 billion and issued bonds at RM1 billion.
However, he said there is sufficient working capital to sustain necessary daily expenditures.
He said the State Government has allocated RM150.7 million annually for loan payments to the Federal Government over a period of 20 years at zero interest rate for loans that will be used for projects that benefit the people such as water supply and sewerage treatment; and at four per cent interest rate for commercial projects secured by KKIP Sdn Bhd and Saham Sdn Bhd.
Furthermore, he said the State Government will continue efforts to claim 40 per cent of Sabah's net revenue from the Federal Government as a special grant for the State, in line with Sabah rights under the constitution.
Shafie said the matter is still being studied and, if necessary, the previous Sabah State Special Grant Review Committee will be revived to enable negotiations between the State and Federal governments to resume.
He added that the State Government will also continue to negotiate with the Federal Government to review and increase oil royalty from the present five per cent to 20 per cent.