Selangor aims to bolster its revenue streams by increasing contributions from state-owned firms and raising raw water extraction fees, reducing reliance on federal funding.

Menteri Besar Dato' Seri Amirudin Shari's press secretary, Jay Jay Denis, shared these plans on Selangor Journal's Lunch On Us! talk show, emphasising the upcoming 2025 Selangor State Budget to be presented by Amirudin today.

"These companies should eventually operate without state grants and return dividends to Selangor once they achieve financial stability," Jay Jay said.

Selangor's government-linked companies are expected to become more financially self-sustaining and to deliver a larger share of profits back to the state. His Royal Highness Sultan of Selangor, Sultan Sharafuddin Idris Shah Alhaj, previously highlighted the state's revenue diversification during his address at the State Legislative Assembly's opening, targeting RM40 million in dividends from state subsidiaries in 2024.

Jay Jay noted that Selangor is also reviewing its raw water extraction fees, currently among the lowest in the country. This adjustment could generate an additional RM70 million to RM80 million annually from major water operators, according to Jay Jay. Alongside these financial measures, the state has introduced stronger environmental policies, including a zero-discharge policy and the polluter pays principle, to enhance waste management accountability.

"We're not targeting the private sector with penalties. Rather, we want to foster shared responsibility in protecting our environment," he added, noting that industrial pollution is a major cause of water disruptions.

In addition, Jay Jay pointed to a broader initiative to increase Selangor's fiscal independence and to advocate for a more balanced relationship between state and federal governments. This aligns with Amirudin's prior proposal for the federal government to return a portion of corporate tax revenue 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," he explained, suggesting that small, evaluative adjustments could be an initial step.

On economic development, Selangor is taking a cautious approach regarding new data centre approvals, addressing concerns over the high water and electricity demand of these centres and prioritising 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," Jay Jay noted.

Nonetheless, he assured Selangor would adequately support its digital economy by meeting local data centre demands without focusing on data export.

Selangor Journal