Page:Report of The Inter-Governmental Committee, Malaysia.pdf/13

11 (15) The principles of Article 166(2) and 166(3) of the Federal Constitution in their relation to land and buildings should apply mutatis mutandis in Sarawak and North Borneo and the principles of Clause (3) should also apply to land and buildings which were used for purposes which might become exclusively Federal after a lapse of time after the establishment of Malaysia (e.g. Medical and Health in the case of North Borneo). (16) The agreement set out in sub-paragraphs (13) to (15) was reached on the understanding that the Federal Government would be responsible for payment of any contribution in lieu of rates in respect of buildings to which Article 166 (3) of the Constitution applies and also for the cost of upkeep. Where office buildings would be occupied only in part by Federal Departments the contribution in lieu of rates and the cost of maintenance would be borne between the Federal and State Governments concerned on a basis to be determined. The possibility of fixing a flat rate per square foot to cover these costs should be examined.

(17) The principle of Article 166 (3) should not apply to Government quarters other than institutional quarters used for exclusively Federal purposes. Where such quarters in North Borneo and Sarawak were occupied by officers serving in or seconded to Federal departments, the Federal Government would pay to the State Government concerned an economic rent on a basis to be agreed. The payment of an economic rent would not affect the question of rent to be paid by the individual officer. The same principles would apply where a Federal quarter was occupied by a State officer.

(18) Sarawak and North Borneo should have a right to raise loans within the confines of the State with the approval of the central bank for the time being of Malaysia, and Article 111 of the Federal Constitution should be amended accordingly.

(19) The Federal Government should accept liability for all current and future pensions (including gratuities and retiring allowances) payable by the Governments of North Borneo and Sarawak and for contributions to the Widows and Orphans Pensions Funds of the Borneo States in respect of officers serving in State and Federal Departments. This should not apply to pensions payable by Sarawak to His Highness the Rajah and his dependants and those future pensions for which either State expressly accepted liability. Similarly, the pensions payable by the State to officers of local authorities and statutory bodies would be Federal on the understanding, however, that the State would reimburse the Federal Government for such pensions, if the authorities concerned did not refund to the Federal Government that portion of the pensions liability which was due from them.

(20) With regard to Article 112 of the Federal Constitution in relation to its application to Sarawak and North Borneo—

(a) the power to approve the creation of posts, up to and including those in Division III of the Borneo establishments where the liability for payment of pensions, gratuities or retiring allowances falls on the Federal Government, should be delegated for one year at a time to the Financial Secretaries of the respective States to be exercised after consultation with the local branch of the Federal Establishment Office; this delegation to be subject to annual renewal at the discretion of the Federal Government and

(b) the Financial Secretaries of the respective States should, subject to annual renewal and consultation with the local branch of the Federal Establishment Office, have delegated power to create supernumerary posts in any Division of the Public Service, as might be necessary to accommodate returning scholars or local staff who were qualified for appointment or promotion to a grade for which there were no vacancies so as to facilitate implementation of the Borneanisation programme.

(21) The Financial Secretaries of North Borneo and Sarawak should consult the local branch of the Federal Establishment Office before creating posts of any grade for contract officers whose salaries and gratuities are borne entirely by the State Government.

(22) All salary scales, whether for permanent or temporary officers and whether or not retirement benefits were the liability of a State or Federal Government, should be subject to the approval of the Federal Government.