Prime Minister Datuk Seri Anwar Ibrahim states that federal expenditure in Johor consistently outweighs the state’s revenue contributions, refuting calls for a 25% revenue return. Between 2023 and 2025, federal spending in the state averaged RM16 billion annually against an average revenue collection of RM14 billion, according to figures released by the Prime Minister in Tangkak on June 22.
Why the debate over state revenue sharing persists
The push for a higher percentage of revenue return to states often stems from regional autonomy goals, yet federal data suggests a complex fiscal balance. Prime Minister Anwar Ibrahim clarified that Johor currently receives more in development and operating allocations than it pays into federal coffers. By contrasting the RM16 billion expenditure against the RM14 billion revenue, the federal administration argues that a 25% rebate model is mathematically unsustainable under current fiscal arrangements.
Johor ranks as the third-highest recipient of federal operating and development expenditure, trailing only Sabah and Sarawak.
How federal-state negotiations influence development projects
Successful state-level negotiations require a cooperative framework rather than adversarial posturing, according to Prime Minister Anwar. He cited the recent RM1.8 billion settlement regarding Bintulu Port as a template for federal-state financial resolution. By prioritizing negotiation over public criticism, the federal government maintains the fiscal stability necessary to fund 13 major development projects in Johor, which range in cost from RM240 million to RM10 billion.
What limits exist for political discourse regarding the Royal Institution?
Prime Minister Anwar Ibrahim cautioned political parties against involving the Royal Institution in partisan electoral battles. During his address at Bukit Gambir, he emphasized that while criticism is part of a healthy democracy, the Malay Rulers should remain an “umbrella for unity.” This statement followed a podcast appearance by Johor Regent Tunku Ismail Sultan Ibrahim, who discussed state-federal relations alongside caretaker Mentri Besar Datuk Onn Hafiz Ghazi.
Frequently Asked Questions
Is Johor currently receiving more from the federal government than it contributes?
Yes. According to Prime Minister Anwar Ibrahim, the federal government spends an average of RM16 billion annually in Johor, while collecting RM14 billion in revenue.
How does the federal government determine state allocations?
Allocations are determined through federal budget planning, which prioritizes development needs and social support programs like the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), where Johor is the second-highest recipient after Selangor.
Why is the Bintulu Port settlement considered a model for negotiations?
The RM1.8 billion settlement is highlighted by the Prime Minister as a successful example of federal-state cooperation, demonstrating that non-confrontational dialogue yields tangible financial results for state governments.
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