‘Could Penang be going bankrupt?’

GEORGE TOWN – Penang MCA has slammed the state’s Budget 2022, which is allegedly unbalanced and can expose the state to bankruptcy in the future.

State MCA spokesman Tang Heap Seng claimed that Penang had RM1.07 billion in state reserves in 2018, but the amount is declining, and Penang had only RM887.78 million in state reserves last year

“Chief Minister Chow Kon Yeow said the Penang budget for 2022 with a deficit of RM449.8 million will be paid from part of the state’s reserves of RM887.78 million remaining in 2020.

“He also said that last year, the budget for 2021, with a deficit of more than RM400 million, was also paid from state reserves.

“So, with such a calculation, will the state reserves be zero by the end of 2021? Will Penang become a bankrupt state?” he asked during a press conference at the state MCA office today.

Last week, the Penang government tabled the state’s 2022 budget with a total allocation of RM935.22 million and an estimated deficit of RM449.8 million, making this its 11th year in deficit since 2011.

Chow said the estimated deficit will be funded by the state’s RM887.78 million in accumulated savings recorded at the end of last year.

Acknowledging that the estimated deficit is high, Chow said the Penang government is optimistic that its revenue collection can grow again with the economic recovery measures being implemented by the state and federal governments.

Tang said the Penang government only has RM400 million in revenue but dared to create a budget deficit of RM400 million, and that this proves the DAP-led government does not have the right financial planning.

He was also worried that the state government would raise taxes or introduce other service surcharges that would instead burden the people in compensating for Penang’s dwindling financial reserves.

“While waiting for the post-pandemic economic recovery, all expenditure should be estimated carefully and wisely for the benefit of the people of Penang.

“Involving the country’s reserves to address the budget deficit is unwise and inappropriate,” he added. – The Vibes, December 2, 2021