Backbenchers support Penang CM’s call for more federal funds

TWO Penang backbenchers supported Chief Minister Chow Kon Yeow's efforts to seek significantly more federal funding to administer the state more effectively.

Chairman of the Select Committee on Federal-State Relations Gooi Hsiao Leung (Pakatan Harapan - Bukit Tengah) said the federal government needs to institutionalise a better formula in the sharing of resources, especially in handling socio-economic issues.

Gooi said that the present arrangement of being too federal-centric is regressive and outdated, as well as unfair to respective state governments.

In 2023, the Federal Government collected RM303 billion in revenue from various segments.

But for the same fiscal year, only RM3 billion was remitted back to the 13 states, said Gooi.

While pointing this out, he said that the comparison is most unfair to the states.

“Penang just receives RM100 million in terms of annual grants from the federal side.

“But the fact is that the state contributed 7.4 percent of the national gross domestic product (GDP) and also generated between RM7 billion and RM8 billion in terms of federal taxation annually,” he said.

He said Penang needs to be given more fiscal empowerment to manage its development rate, welfare, healthcare and localise infrastructure needs.

He said the federal development allocation were mostly centred around the Klang Valley and this is unfair to states located out of the main economic hub.

Seri Delima assemblyperson Connie Tan Hooi Peng also underscored the importance of changing how the federal side allocates fiscal development funding to the state.

Although Penang is small in terms of size, the state contributes a lot of taxes to the federal side, hence it is only fair that it seeks more national funding to underpin its development and welfare needs, said Tan.

She supported Chow's assertion that Penang needs more federal funding based on the role it plays in developing the national economy.

"Allocating more funds to the states would not weaken the federal fiscal position. On the contrary, it would ensure equitable channelling of funds to the needy."

It is a win-win formula for all sides, said the first-term backbencher.

Despite impressive growth rates, especially in wooing foreign direct investments into the state, Penang's public coffers are depleted due to the need to spend a lot of late on social amenities, emoluments, welfare and localise socio-economic needs.

With a limited landbank and natural resources, the state last year needed an emergency injection of federal funding to settle wages of its civil staffers and other needs. - August 28, 2025.