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CM denies Penang heading for bankruptcy [NSTTV]

GEORGE TOWN: The Penang government has dismissed claims by its detractors that the state is heading towards bankruptcy.

Chief Minister Chow Kon Yeow, in allaying such fears during his winding up speech at the last day of the state legislative assembly sitting, said the state still has an accumulated reserve of RM1.82 billion as of last year and not RM888 million as stated by Lim Guan Eng (DAP - Air Putih).

Lim, according to Chow, had said that the state's accumulated reserves during the change of government in 2008 was RM849 million and that the amount had increased to RM2.1 billion in 2018.

Lim had also said that in the last two to three years, the state's accumulated reserves had dropped from RM2.1 billion to RM888 million.

"I want to explain and correct the statement. During the change of government in 2008, the state's accumulated reserve was RM847.45 million, which increased to RM1.97 billion 10 years later. Subsequently, in 2019, the state government managed to increase the reserves to RM2.1 billion.

"However, we could not keep up with the performance for last year as the state, just like the federal government and other states, faced great challenges due to the effects of the Covid-19 pandemic. We had spent huge allocations to assist various segments of society badly hit by the Covid-19. At the same time, the state government's revenue also reduced whereby we only managed to collect RM467.28 million compared to the original projection of RM519.16 million.

"These factors have resulted in the state's accumulated reserves to reduce from RM2.1 billion to RM1.82 billion last year, and not RM888 million as stated. For the record, the amount of RM888 million only comprised the state's consolidated fund and have not taken into account the state's trust fund amounting to RM933.68 million in 2020. The state's trust fund is an account set up for specific purposes and the allocation received in the account can only be spent for specific purposes.

"The comparison made is not 'apple to apple'. As such, let me stress again that the state's accumulated reserves had only reduced from RM2.1 billion in 2019 to RM1.82 billion last year," he said.

Yesterday, Penang MCA spokesman Tang Heap Seng had slammed Penang's 2022 Budget, which he alleged was unbalanced and could expose the state to bankruptcy.

Last Friday, Chow had tabled a RM935.22 million budget for next year, with a projected deficit of RM449.80 million, which is a higher deficit compared to this year's budget. This was the 11th consecutive deficit budget for Penang since 2011.

For this year, Penang had tabled a RM909.82 million budget, with a projected deficit of RM403.8 million.

Chow had said then that the increase in budget was due to the increase in annual emolument, giving of grants to state government subsidiary companies, the implementation of the recovery plan post-Covid-19 and others.

He had also said that the higher deficit for next year would be funded by the state's consolidated fund, with a balance of RM887.78 million at the end of last year (2020).

Today, in his winding up speech, Chow reiterated that the higher deficit budget for next year was unavoidable, stressing that the state had to spend to ensure the administration machinery can operate more efficiently, more so post-Covid-19.

"We are committed in ensuring the financial management of the state is done in a competent, accountable and transparent manner besides prudent spending to minimise the deficit.

"At the same time, we will also source for new alternatives to increase our revenue after our economy recovers from the effects of this pandemic," he added, pointing to the fact that the state's financial report for 2020 had been audited by the Auditor-General.

He said the state's financial report for 2020 had been given a clean certification.

"This proves that the state's financial management is efficient and in proper order," he added.

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