He said higher hotel taxes, increased liquor licence fees, and the urgent recovery of quit rent arrears were among 24 strategies being implemented to address the state’s cash flow problem.
Chow said the cash flow problem was caused by a failure to control expenses and a general increase in the cost of running the government.
He said that higher salaries for state civil servants and a larger number of Penangites qualifying for cash aid also put pressure on Penang’s coffers.
“We asked for the sum as a standby for a deficit that might happen or cause a cash flow problem. We were expecting a larger deficit this year of up to RM500 million, but thankfully we have reduced it to about RM100 million plus,” he told the state assembly in response to a question by Goh Choon Aik (PH-Bukit Tambun) about the state’s general finances.
Gooi Hsiao Leong (PH-Bukit Tengah), another backbencher, asked if the RM100 million was enough to address the cash flow issues.
Chow said the amount was sufficient, and that if the state’s finance officials approved, any unused portion of the advance might be returned to Putrajaya.
He also played down the perception that Penang was a wealthy state due to high investment levels.
“Third party views, and even the federal government thinks we are rich. While we are getting investors, all the (tax) money is going to the federal government. The state only makes money from land sales and spin offs from local businesses. All these investors are paying taxes to the federal coffers, not the state,” he said.
Chow said the state planned to recover RM6 million in unpaid quit rent from parcel owners and auction off valuable government land. He said it was also considering revising land category parameters and lease conversion approvals to accelerate development.
Liquor licence and entertainment duty rates will also be revised, with new entertainment fees expected to take effect soon. Veterinary service charges have been raised, while plant rental fees at the Botanic Gardens are also under review.
Chow said the state was also working with private firms to manage idle government quarters and reviewing hotel fees with federal and local authorities.
The chief minister earlier revealed that Penang ended 2024 with RM1.38 billion in total consolidated funds, slightly lower than the RM1.46 billion received the year before.
The state recorded a deficit of RM174 million, an improvement from RM358 million in 2023. It collected RM810 million in revenue and spent RM719 million on operations, with RM265 million transferred to its development fund.