GEORGE TOWN: Penang today tabled a RM909.82 million budget for next year, with a projected deficit of RM403.8 million, which is a higher deficit compared to this year's budget.
This is the 10th consecutive deficit budget for Penang since 2011.
Chief Minister Chow Kon Yeow said the deficit for next year was higher compared to this year's RM273.5 million, which would be funded by the state consolidated fund, with a balance of RM1.07 billion as of 2018.
He said next year's budget was also RM117.16 million more than this year's budget of RM792.66 million.
"The 2021 Budget has been drafted responsibly to strike a balance between social needs and economy, while taking into account the state's financial capabilities.
"It is also in line with the Penang2030 vision to strengthen the state's economic recovery process," he said when tabling the 2021 Budget speech at the state legislative assembly sitting here today.
It took Chow two solid hours to outline the current status of the state's economy and the state's planning for next year, amidst the global Covid-19 pandemic.
Chow said while Penang's economy was expected to grow this year, the reality was that it had shrunk since April this year due to the pandemic.
He said the state's think tank body, Penang Institute, estimated that unemployment rate increased over three per cent this year, compared to two per cent in 2019 and 2.2 per cent in 2018.
The trend of retrenchment in the services, hospitality, commerce, tourism and property sectors due to the spread of Covid-19, he added, had contributed to the increase in unemployment rate.
"To revive the economy, the state government had approved financial packages in three phases, totalling RM155.5 million.
"Besides that, the state government had also set up the Penang Socio Economic Recovery Consultative Council Committee (PSERCC) to execute short and medium-term strategies to stimulate economic growth, attract foreign and local investments and ensure a sustainable socio-economic development post-Movement Control Order (MCO)," he added.
Chow said the proposed state development budget for next year was RM294.1 million, an increase of RM24.76 million compared to this year's development budget of RM269.34 million.
The state government, he added, expected to collect RM506 million in revenue next year, a decrease from RM519.1 million projected for this year.
He noted that the expenditure of RM909.82 million for 2021 included emoluments totalling RM188.22 million, supply and services (RM183.37 million), assets (RM3.37 million), fixed payments (RM532.05 million) and other expenditure (RM2.82 million).
A large chunk of the expenditure, about 58.48 per cent of the state administrative expenditure, was due to fixed payments and aid expenditure, he added.
"Seven of the nine state departments will see an increase in allocations next year, with the Chief Minister and State Secretary's Offices seeing a 50 per cent increase, from RM53.1 million this year to RM77.5 million in 2021.
"This is to carry out people-centric programmes and upgrading of public facilities while strengthening the various departments to implement the projects on schedule," he said.
He added that the Islamic Religious Affairs Department would also be getting a higher allocation of RM18.61 million compared to only RM11.09 million this year, the Drainage and Irrigation Department (RM17.59 million compared to RM17.53 million this year), Agriculture Department (RM6.75 million compared to RM4.94 million), the Veterinary Department (RM3.52 million compared to RM2.98 million), the Forestry Department (RM2.22 million compared to RM2.06 million) and the Botanic Garden Department (RM1.22 million compared to RM1.15 million).
As for allocation to fund development projects under the State Finance Office and the state Public Works Department (PWD), Chow said the amount received would be lower for next year.
Meanwhile, the current state legislative assembly session also saw the change in seating position for four former Pakatan Harapan backbenches, who had since voiced support for the Perikatan Nasional bloc, to the opposition side.
They are Teluk Bahang (Zolkifly Md Lazim), Seberang Jaya (Dr Afif Bahardin), Bertam (Khaliq Mehtab Mohd Ishaq) and Sungai Acheh (Zulkifli Ibrahim).