KUALA LUMPUR: Keningau MP Datuk Seri Panglima Dr Jeffrey Kitingan criticised the federal government’s oversight of Labuan, asserting that the territory’s residents have suffered due to broken promises of development.
“The federal government has failed to uphold its pledge to transform Labuan into a thriving tourist destination, a duty-free zone, and a trade centre,” said Jeffrey when debating the Federal budget on Monday.
“The stark reality is that the Federal Government’s promises for Labuan’s development have fallen drastically short of expectations,” he asserted.
He reminded the parliament that Sabah’s government handed over Labuan in 1984 during Tan Sri Harris Salleh’s tenure as Chief Minister, with the understanding that the federal administration would advance its development.
“Yet, this development has been grossly inadequate,” he said.
Jeffrey highlighted the detrimental impact of Petronas relocating its operations from Labuan to Bintulu, a move that stripped the island of significant economic activity and livelihoods.
“The abrupt departure of Petronas has led to a catastrophic exodus of jobs and business. What was once a hub of prosperity is now a tale of economic desolation,” he remarked.
The Deputy Chief Minister said that Harris has repeatedly voiced disappointment over the federal government’s failure to fulfill its developmental promises, calling for Labuan’s administration to be returned to Sabah.
Jeffrey proposed that the federal government take immediate corrective measures including authorising Sabah to impose and collect sales taxes on crude oil and gas exports from Labuan, as a matter of fair economic practice.
“It is a matter of fiscal justice that Sabah is permitted to collect sales tax on its natural resources. This move is essential to address the technical issues and ensure Sabah’s rightful revenue is secured,” Jeffrey proposed.
Furthermore, he called upon the Federal Government to direct Petronas to re-establish its operations in Labuan, which he believes would inject much-needed life back into the local job market.
“To breathe life back into Labuan’s trade and commerce, we must reinstate the full duty-free status of the island,” he emphasised.
“As for returning Labuan to Sabah’s governance, until such time can be done, I propose that there should be a joint administrative effort between the federal and state governments.
“A collaborative administrative approach is critical while we navigate the return of Labuan’s governance to Sabah. This ensures that both federal and state policies serve the best interests of Labuan’s residents,” he concluded.
