Recently Perikatan Nasional (PN) has promised to return 40 percent of Sabah’s federal revenue to the state. This has long been one of the key points of contention in the Sabah–Putrajaya relationship.
The question, however, is whether PN truly means what it says, or whether it is simply a political ploy designed to throw a spanner into its competitors’ election strategy. Muhyiddin Yassin, after all, has been prime minister before. If he did not return the 40 percent when he had the chance, why would he be interested in doing so now?
PN, by most observers’ reckoning, has next to no chance of making a major impact in the Sabah election. The coalition is widely perceived as a “Malaya party” by the Sabahan electorate, and its brand of politics—heavily grounded in race and religion—is unlikely to receive a warm reception in a state where the demographic and political culture are markedly different from the Peninsula.
Even if, by some extraordinary turn of events, PN were to win the upcoming Sabah election or at least secure a meaningful presence in the assembly, it still would not control Putrajaya. That gives PN an easy escape clause: it could simply claim it cannot fulfill the 40 percent pledge because it is not the federal government. The promise then becomes a useful rallying cry for the next general election, rather than a binding commitment.
In that sense, PN might not be aiming to govern Sabah at all but to make headlines by pledging something it knows it cannot be forced to deliver. By floating the promise, PN shifts pressure onto parties that actually have a path to govern—Gabungan Rakyat Sabah (GRS) and Pakatan Harapan (PH). If GRS, which leads the state, is asked whether it will press its federal partner PH to return 40 percent of Sabah’s revenue, the question becomes uncomfortable for both.
If GRS does not ask, and PH does not offer, they risk appearing indifferent to Sabah’s rights. If they do ask and PH promises to pay, then the follow-up question is inevitable: why not return the 40 percent now, when PH controls Putrajaya and GRS governs the state?
Therefore, likely then being sincere in wanting to fulfil its pledge, PN is likely more interested in putting PH and GRS in an difficult position with the question, with the hope that if PH and GRS are unable to address the question, the Sabahan voters will be turned off by PH and GRS, and PN can thus gain from the loss of PH and GRS.
For decades, the question of revenue sharing between Sabah and Putrajaya has been a political thorn. Under the Malaysia Agreement 1963 (MA63), the state was entitled to 40% of the net federal revenue collected from within its borders. That formula, however, was suspended in 1974 and replaced by “special grants” from the federal government. Ever since, Sabah leaders across the aisle have argued that the state’s rights have been steadily diluted and have repeatedly demanded the return of the original arrangement.
The debate remains unresolved. As recently as July, Deputy Prime Minister Fadillah Yusof said the federal government would only decide on Sabah’s proposal to reclaim its 40% entitlement at the next MA63 committee meeting, scheduled for September 12. Until then, the call for reinstatement remains more aspiration than policy.
It is against this backdrop that Perikatan Nasional (PN) chairman Muhyiddin Yassin chose to make a headline-grabbing pledge. Speaking to Utusan Malaysia, the former prime minister announced:
“When the time comes, we will present a comprehensive manifesto. One of our key commitments will be a constitutional demand: the return of 40% of federal revenue collected from Sabah to the state government.”
This pledge lands just as Sabah inches toward an election. Chief Minister Hajiji Noor recently signalled that the state assembly might be dissolved “in the coming weeks,” though no date has been confirmed. On the federal side, Pakatan Harapan (PH) has already forged electoral pacts with Gabungan Rakyat Sabah (GRS) and Barisan Nasional, but those arrangements stop short of a full three-way coalition despite repeated calls from Prime Minister Anwar Ibrahim for unity.
Adding intrigue, Muhyiddin has hinted at fresh alliances. He admitted PN had “held informal discussions with a political party to explore the possibility of cooperation ahead of the Sabah state election,” while keeping the details close to his chest.
“Certainly, cooperation will not be with Pakatan Harapan (PH) or Gabungan Rakyat Sabah (GRS). We’ll see who may be interested in working together, and we’ll discuss. PN is prepared to cooperate with any party considered suitable,” he said.
With an election looming, PN’s revenue pledge taps into a deeply rooted Sabah grievance while positioning the coalition as a champion of state rights. Whether the promise proves to be a genuine plan or simply an election-season gambit remains to be seen—but it has already sharpened the conversation about Sabah’s decades-old quest for a fairer share of its own revenue.
For now, PN’s pledge exists only on paper. Without federal power, the coalition cannot execute the promise even if it wins in Sabah. That reality, coupled with PN’s limited prospects in the state, fuels speculation that the announcement is more about shaping the narrative than preparing to govern.
Whether Sabahans see it as genuine advocacy or political theatre will likely be revealed when the state heads to the polls.
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