Continuous Penang budget deficit a concern, says MCA

GEORGE TOWN: Penang's financial health following a projected deficit of RM449.8mil in its Budget 2022 is a concern, says Yeoh Chin Kah.

The Penang MCA liaison committee secretary said they were concerned over the state's management of state reserves following the budget tabling and its impact on the people in the long run.

"The deficit budget of the Penang state government is over RM400mil per year, while the state reserves left for next year is estimated to be around RM400mil only.

"Chief Minister Chow Kon Yeow announced that Penang's Budget 2022, with a deficit of RM449.8mil will be paid from part of the state's reserves of RM877.78 mil left from 2020.

"He also said that the Budget for 2021 with a deficit of more than RM400mil was also paid from state reserves," said Yeoh.

He questioned if the state's reserves would go down to nil by the end of 2021 and if the state faced potential bankruptcy.

Yeoh said that in 2018, Penang had RM1.07bil in reserves but by 2020, only RM87.78 mil was left.

"The amount will be used to pay for the deficits of Budget 2021 and 2022, and such actions may empty the state's treasury," Yeoh said during a press conference at the MCA headquarters in Jalan Transfer on Thursday (Dec 2)..

Yeoh added that the state's revenue for 2022 is estimated at only RM485.42mil, far lower than the RM574.56mil revenue up to October 2021.

Yeoh urged Chief Minister Chow Kon Yeow to respond to the matter.

On Nov 26, Chow tabled a RM935.22mil budget for next year, themed "Accelerating Penang 2030", with a projected deficit of RM449.8mil which was higher than this year's budget.

Penang had tabled a RM909.82mil budget with a projected deficit of RM403.8mil this year, the 11th consecutive deficit budget for the state since 2011.

According to Chow, this was due to the increase in annual emolument, giving of grants to state government subsidiary companies and the implementation of the recovery plan post-Covid-19 pandemic, among others.

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Penang , Deficit budget , MCA


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