By Danial Dzulkifly
SHAH ALAM, Nov 15 — Selangor is looking to boost its revenue with increased contributions from state-owned firms and higher raw water extraction fees as part of efforts to reduce dependence on federal funding.
Menteri Besar Dato’ Seri Amirudin Shari’s press secretary Jay Jay Denis said the state government plans to make its government-linked companies more financially independent while ensuring they contribute a larger share of profits back to state coffers.
“These companies should eventually operate without state grants and return dividends to Selangor once they achieve financial stability,” he said in the latest episode of Selangor Journal’s Lunch On Us! talk show yesterday, which focused on the upcoming 2025 Selangor State Budget to be tabled by Amirudin today.
When delivering the royal address during the opening of the First Meeting of the Second Session of the 15th State Legislative Assembly on February 27, Sultan of Selangor Sultan Sharafuddin Idris Shah Alhaj said efforts to diversify the state’s revenue will begin by increasing the government’s income through contributions and dividends from subsidiaries, agencies and statutory bodies.
His Royal Highness said the state administration is targeting a total of RM40 million in dividend payments in 2024 from subsidiaries under the purview of Menteri Besar Selangor (Incorporated).
Jay Jay revealed that Selangor is also reviewing its raw water extraction fees, which currently rank among the nation’s lowest.
The proposed revision could generate an additional RM70 million to RM80 million annually from major water operators, he said.
Simultaneously, Jay Jay said the state is strengthening its environmental protection measures through a zero discharge policy and polluter pays principle, which aim to make industries more accountable for waste management.
“We’re not targeting the private sector with penalties. Rather, we want to foster shared responsibility in protecting our environment,” he said, adding that water disruptions often stem from industrial pollution.
Jay Jay said these initiatives are part of a broader strategy to enhance Selangor’s fiscal independence amid calls for a more equitable relationship between states and the Federal government.
This follows Amirudin’s previous proposal that a portion of the corporate tax, which the Federal government collects, be returned to the states.
“The federal system needs to become more equitable. Without reform, some states might struggle to maintain basic operations within the next decade, potentially burdening federal resources,” Jay Jay said.
“We could begin with small adjustments, evaluate their effectiveness, and make necessary modifications to achieve a balanced solution.”
Meanwhile, on economic development, Jay Jay said Selangor is taking a cautious approach in the approval of new data centres in the state, citing concerns over their huge water and electricity consumption and the need to prioritise domestic needs.
“You will not see a mushrooming (of data centres) like in Johor for sure. There’s also the issue of job prospects; you don’t really have many people working in data centres around the clock because there’s only space for racks of servers to function.
“But when it comes to supporting our digital economy, we will ensure there are enough data centres to meet the demand, but not for the purpose of exporting data.”
