Saturday, March 30, 2013

Penang’s Deficit Hits RM262 Million in 2013

In a development that comes as a big embarrassment to Penang Chief Minister Lim Guan Eng, the state's 2013 Budget has a huge deficit of RM262 million.
He tried to put a brave face on the fiscal deficit, which represents a staggering 26.9 per cent of the annual budget of RM970.56.
Guan Eng claimed that the deficit would be "covered by the state consolidated fund balance amounting to RM710.81 million as at the end of 2011."
So in effect the Chief Minister is spending the state's reserves on running a deficit. So much for fiscal prudence, Guan Eng.
As in all other areas, DAP clearly demands fiscal prudence from everybody else, except when it concerns its own state government in Penang.
The 2013 Budget has been optimistically labelled as 'Equitable Economic Agenda', with DAP claiming it will ensure the well-being of the state's people.
Under this budget, the Penang government hopes to eradicate poverty by raising the incomes of the 2,000 households below the poverty line to RM770 a year. This programme would involve an expenditure of RM20 million every year.
However, Teluk Bahang assemblyman Datuk Seri Helmi Yahaya pointed out that this was not the right approach to helping poor people improve their standard of living.
"The state government should think of another mechanism that is more proactive to spur economic growth and to raise the people's productivity level.
"If the proposed policy is carried out, the people will continue to be dependent on the government and the poverty problem will never be solved," Helmi said.
With GE 13 looming, Guan Eng tried to attract all groups through his Budget. To attract women voters, he allocated RM2.3 million for women's development and welfare and RM3 million for free mammogram check-ups for women.
The state has allocated a surprisingly high RM46.42 million for religious purposes, including the upgrading and development of mosques, suraus and public religious schools.
But in the controversial area of housing, the state government allocated a mere RM50 million for its Housing Assistance Programme of Penang, which is not likely to improve the lack of affordable housing in the state.
All in all, Penang's 2013 Budget is an election Budget. The DAP-led state government has tried to pander to all groups, but has left a huge fiscal hole instead.
Guan Eng has once again paid lip service to fiscal prudence. What matters to him most is votes, even if these come at a heavy cost to the state exchequer.
The bill will, of course, be left for the people of Penang and the next state government to deal with.

1 comment:

Anonymous said...

FDI to penang also drops steadily. Penang surely turning into Pyong Yang. What to expect when a failed accountant became a tokong cm. who to blame ? MS EXCEL..... OR MS WORD hahahahaha