Proposing his “people-centric” budget in the state assembly, Chow said the government will spend RM5.5 million by paying a half-month “special financial aid”, or a minimum RM1,000, to the 4,009 civil servants in the state in December.
The 2021 budget is an increase of 14.7% compared with this year’s, which amounted to RM792.6 million.
Chow, who is the Padang Kota assemblyman, said the state will tap into its reserves, which stood at RM1 billion at the end of 2018, in view of the projected RM403.8 million deficit.
He said the state expects “limited government revenue” of RM506 million next year, lower than this year’s RM519.1 million.
However, development spending will go up to RM294.1 million, an increase of RM24.7 million from this year.
While lower revenue is expected next year, he said the state must maintain the same level of operating and development expenses recorded this year.
Fixed payments to total RM532 million
Chow said fixed payments will take a large chunk of RM532 million of the operating expenditure. According to the Treasury website, fixed payments include grants and other payments such as interest, dividends, national debt payments, pensions, rewards, insurance claims and compensation.
Another RM188.2 million will be set aside for emoluments (salaries), RM183.3 million for services and supplies, RM3.3 million for assets and RM2.8 million for miscellaneous expenses.
He said seven of the nine state departments will see an increase in allocations next year.
Leading the list are the chief minister’s and state secretary’s offices, which will see a 50% increase — from RM53.1 million this year to RM77.5 million in 2021 — to carry out people-centric programmes.
The increase is to fund a RM12.7 million sporting development project on behalf of the state-owned Stadium and Open Spaces Corporation, and other projects.
70% increase in allocations for Islamic affairs
The State Islamic Affairs Department will receive an increased allocation of RM18.6 million compared with RM11 million previously, a 70% increase, while the Drainage and Irrigation Department, which deals with flood mitigation, will be allocated RM17.59 million, compared with RM17.53 million this year.
The Agricultural Department will receive RM6.7 million (up from RM4.9 million this year), Veterinary Services RM3.5 million (RM2.9 million), Forestry RM2.2 million (RM2 million) and Botanic Gardens RM1.2 million (RM1.1 million).
Chow said the allocation for development under the State Finance Office (SFO) and state Public Works Department (PWD) has dropped for next year. He said the reduction for PWD was due to Putrajaya’s MARRIS federal road repair funds extending to the maintenance of state roads.
The funding for the SFO will be lower at RM148.9 million compared with RM152.3 million this year, while PWD will receive RM17.7 million compared with RM24.1 million.
He said Penang’s economy remains one of the best in the country, with the state recording RM9.1 billion in approved manufacturing investments, domestic and foreign, in the first half of this year.
Chow said the Covid-19 pandemic has had some effect since April, with state think tank Penang Institute estimating above 3% unemployment this year, compared with 2% last year and 2.2% in 2018.
He said the sectors most affected by unemployment are hospitality, wholesale trading, retail, tourism and real estate.
The RM155.5 million state Covid-19 stimulus package, he said, has helped keep those affected afloat.