PENANG has recorded a surplus of RM235.55 million under its consolidated account as of today, Chief Minister Chow Kon Yeow said.
Contrary to concerns over the financial status of the state, Chow insisted that the state chose to undertake a responsible fiscal stance rather than a populist one.
Elaborating on why there was a need to seek a RM100 million advance from the federal treasury, Chow said that the state has recorded a high rate of foreign direct investments, but the proceeds went direct to the federal.
The state could only count on land premiums and sale, whereas the lease of the land was never raised for the past 30 - years, said Chow when winding up at the state legislative assembly sitting today.
Penang also needed to invest more to upskill its talent force by establishing among others; the Penang GBS Industry Academy and the STEM Talent Blueprint.
Most of the state's revenue is driven by non-taxable sources, whereby 67% came from land premiums, services fees and return on investments.
The state will redouble efforts to locate more resources and consolidate on the present resources so there is no burden passed onto the ratepayers here, he said.
He said that there is no need to be alarmed with the advance of RM100 million from the federal government, saying that it was meant to ease the cash flow needs.
"The advance meant that the Finance Ministry will offset the customary four allocations to Penang. For 2027, a total of RM33 million, 2028 another RM33 million and in 2029, RM34 million," said the Padang Kota assemblyman.
Responding to former chief minister Lim Guan Eng (Air Puteh-PH), Chow stated that the RM1.15 billion left behind in the state reserves from the consolidated fund was unfortunately reduced.
It is because the state had encountered difficulty in upping up its revenue collection, he clarified.
The reduction was also attributed to the fiscal deficit the state had incurred in some intervening years between 2019 and 2024.
Chow pointed out that the RM1.15 billion in reserves as of 2019 was partially contributed by the purchase and development agreement of Bayan Mutiara.
The deal was worth RM1.072 billion.
If the state minuses the land sale, the actual state reserves would be RM621.5 million only and even lower if the proceeds which belonged to the Penang Development Corporation (PDC) of RM414.4 million were channelled back earlier.
Chow also hopes that the state can derive more revenue from the special financial zone - the Penang International Financial Centre, which is now been explored by the state think tank - Penang Institute.
Chow vow to leave as least RM1 billion in reserves of the consolidated fund by the end of his term in office.
"I hope to handover the state in a strong financial standing. I want the state to be ready for future challenges," said Chow. - May 22, 2025.
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