Other states have no legal, historical basis to demand same right because Sabah’s claims constitutionally unique under MA63: Analysts
PETALING JAYA: The federal government’s move to honour Sabah’s 40% revenue entitlement has drawn mixed reactions from experts.
They told theSun that the decision by the High Court on Sabah was made under special circumstances and would not necessarily pave the way for other states to demand similar revenue claims from the government.
Universiti Malaya socio-political analyst Prof Dr Awang Azman Awang Pawi said Sabah’s recent victory would not actually allow other states to demand similar arrangements, as the claim is constitutionally unique under the Malaysia Agreement 1963 (MA63).
He said Sabah’s position is firmly rooted in Articles 112C and 112D of the Federal Constitution which were specifically crafted to safeguard the Bornean territories during the formation of Malaysia.
“Other states have no legal or historical basis to demand the same 40% revenue right. Sabah’s entitlement is part of MA63’s special safeguards, and this protection does not extend to peninsular states.”
He warned that if peninsular states attempt to pursue similar claims despite lacking constitutional grounds, it could severely damage the federal government’s fiscal stability.
“The national budget relies heavily on centralised revenue. If every state starts demanding equal entitlements it would weaken our redistribution system and undermine the foundation of Malaysian federalism.”
Awang Azman said other states may push for more development funds but such requests would be political in nature, not legal claims comparable to those provided for under MA63.
He said if similar demands emerge, Putrajaya must respond by clearly reaffirming the constitutional uniqueness of Sabah and Sarawak while still engaging states through proper consultation mechanisms.
“The federal government should offer alternative channels for development funding, maintain transparent communication about fiscal constraints and ensure that states understand the legal limitations of their claims.”
While acknowledging that such disputes could strain federal-state relations, he said tensions could be managed through structured negotiations, clear legal processes and respecting constitutional processes and good federal-state communication.
“The federal government’s decision not to appeal the High Court ruling on Sabah’s 40% entitlement reflects a commendable commitment to constitutionalism and respect for judicial processes.
“From the governance perspective, focusing on overlapping allocations, federal-state responsibilities and the MA63 framework promotes transparent negotiations and supports equitable development and fiscal fairness for Sabah.”
Nusantara Academy of Strategic Research senior fellow Prof Dr Azmi Hassan said the government’s narrow challenge to the High Court ruling is significant because it centres on the judge’s observation that Putrajaya had acted “illegally” for decades in handling Sabah’s 40% entitlement.
He said while Sabah’s 40% share is constitutionally guaranteed, the implication of the court’s remarks goes far beyond the state.
“For Sabah, the matter is clear cut because the 40% is enshrined in the Federal Constitution. Other states, including Sarawak, do not have such a provision. Their allocations are based on mutual trust and negotiations with the government.”
Azmi said if the judge’s finding that the federal government acted unlawfully is left unchallenged, it could open the door to disputes from other states regarding their past revenue arrangements.
“This is why the government is challenging that part of the judgment. If Putrajaya is deemed legally at fault, then any previous negotiation between the federal and state governments, whether with Sarawak or peninsular states, could be subject to future claims.”
He said unlike Sabah, there is no constitutional formula that dictates how much federal revenue should be returned to other states.
“There is no fixed percentage for Sarawak or any other state. Their grants are not constitutionally protected. If the court’s finding stands, it may open a can of worms because states could start questioning federal payments that were negotiated in the past.”
Azmi said leaving the ruling unchallenged could trigger a cascade of fiscal and legal uncertainties.
“It’s not just about Sabah’s entitlement. The implications could ripple across the entire federal-state financial structure.”
