PUTRAJAYA: THE National Finance Council will contribute RM470 million to the State Reserve Fund in 2016.
Prime Minister Datuk Seri Najib Razak said out of the RM470 million, RM190 would be disbursed to states with insufficient funds in their operating accounts.
The remaining RM280 million will be given out based on the rate of economic development, infrastructure and overall well-being.
Najib, who is also finance minister, said an additional RM50 million would be allocated to the State Reserve Fund for the maintenance and upgrading of state roads.
With the additional RM50 million, the State Reserve Fund for next year stands at RM480 million.
“The National Finance Council has also agreed to form a State Revenue Committee, which will be chaired by the treasury secretary-general. He will look at ways to improve revenue collection and plug any leaks,” Najib said after the council’s meeting here yesterday.
Najib also urged all states to utilise available funds to maintain state roads for users’ safety and convenience.
“The council found that although this grant was available for some time, its disbursement was far from satisfactory.”
He said last year, the states spent RM2.93 billion, or 82.1 per cent, from the RM3.5 billion grant allocated by the government.
The spending rate was far below the RM2.59 billion, or 91.2 per cent, of the RM2.85 billion made available by the government.
The large allocation made available for the State Road Grant was to ensure that state roads were maintained efficiently.
“The Federal Government wants the states to enhance the utilisation of the State Road Grant.
Its utilisation will be monitored closely.”
On the State Revenue Committee, Najib said it would also act as a platform for states to share the best practices and methodology for revenue collection.
“This proposal was the Federal Government’s proactive measure to boost state income collection and is also in line with the Government Transformation Programme.”
The committee members will comprise the auditor-general, attorney-general, Economic Planning Unit director-general, accountant general, state financial officers, the Tax Division secretary and National Budget Office director.
