21-05-2025
- Business
- New Straits Times
Opposition flags Penang's financial woes, calls for recovery plan
GEORGE TOWN: The opposition in Penang has raised concerns over the state's financial performance, claiming it is deteriorating and placing an undue burden on the public.
State opposition leader Muhammad Fauzi Yusoff said the opposition bloc viewed the state's current financial situation with grave concern, particularly in light of reported cash flow constraints within the state administration.
"This situation clearly reflects a failure in financial governance.
"We demand immediate clarification and remedial action from the state government," he told reporters on the sidelines of the state legislative assembly sitting today.
Fauzi said the state government's recent admission of cash flow issues — alongside its plans to raise charges and intensify tax collection — called into question the efficiency and priorities of an administration that has long claimed to practise sound financial management.
He cited the Auditor General's Report tabled in October 2024, which showed a sharp decline in the Consolidated Fund: the Revenue Account fell by 52 per cent in 2023 compared to the previous year, while the Trust Account saw a 2.9 per cent drop.
Even more concerning, he added, was the fact that state expenditure increased by 13.9 per cent, while revenue declined by 0.4 per cent during the same period.
"This imbalance is deeply alarming and suggests the state's financial management is in a worrying state," he said.
Fauzi said that if the trend continues, Penang could face a critical liquidity crisis, potentially leading to an inability to fund management expenses or pay civil servants' salaries.
"We reject the approach of increasing public charges as a shortcut to boosting state revenue. The people should not be made to bear the cost of administrative shortcomings," he said.
As such, Fauzi called on the state government to urgently present a five-year financial recovery plan to mitigate rising fiscal risks.
He also urged a thorough review of state spending priorities, distinguishing between essential and non-essential expenditures.
"The state's administrative structure and processes must be strengthened to prevent further management failures from impacting the people," he added.
The state's financial performance has emerged as a key point of debate during the ongoing legislative assembly sitting.
Chief Minister Chow Kon Yeow is expected to address these concerns in his winding-up speech tomorrow.
