THE Federal Government should start considering how it can empower the states.
Chief Minister Chow Kon Yeow said Penang, with its notable achievements in industry and export, should receive increased funding to implement initiatives and programmes tailored to its unique needs.
“Meanwhile, major development projects by the Federal Government can continue to ensure broader national objectives are met,” Chow replied during a conversation session with Maybank Investment Banking Group chief economist Suhaimi Ilias, who moderated the session today.
The session was part of the Maybank’s Invest ASEAN 2024 on ‘ASEAN Frontiers: The New Trailblazers’ event at Setia SPICE Convention Centre. It was Maybank Investment Banking Group’s flagship regional event that connects global institutional investors with corporates from ASEAN and expert speakers.
Chow said that the nation aspires Penang to be an economic powerhouse and a hub for the semiconductor industry.
“However, where are the necessary resources?
“There is a misconception that we are already a fully developed state. As a developed state, we should not have to compete with Perlis, Kedah, or Pahang for Federal funding.
“In reality, these states receive more Federal funding than Penang.
“Despite consistently being among the top three in economic performance, we are among the bottom three in terms of Federal funding received.
“This disparity puts us in a difficult position. With more funding, we could achieve even greater success,” he said.
Chow added that Penang is widely recognised as a vibrant economic hub, particularly in the northern region, due to its numerous industries, developments, and infrastructure.
“This impression, however, stems largely from private sector success.
“Despite thriving businesses, the revenue generated primarily benefits the Federal Government through corporate taxes, while Penang is left with limited sources like land and local council assessment taxes.
“This funding is insufficient to sustain a state as dynamic as Penang.
“As a result, we heavily rely on the private sector to drive many initiatives and appreciate this collaboration due to the state’s limited financial capacity,” he explained.
Speaking about revenue-sharing between the Federal and the states, Chow said it could be achieved by not only through Constitutional amendment but also through a change in policy.
“I proposed a review of the Federal Government’s allocation to the states during the recent Penang Legislative Assembly.
“We are requesting that 20% of the taxes collected by the Federal Government from Penang be allocated to the state government to enhance its development efforts.
“During my recent conversation with Prime Minister Datuk Seri Anwar Ibrahim, he was aware of the state’s proposal,” he said, adding that the state would present the proposal to the Federal Government at the upcoming Special Meeting for all Menteris Besar, Chief Ministers and Premier in July.
Commending Anwar’s leadership, Chow said Penang was grateful to have received approvals for numerous major infrastructure projects.
“We had hoped for such support from previous prime ministers, but it did not materialise.”
Earlier, in his keynote address, Chow emphasised that the state and Federal governments are committed to maintaining a thriving ecosystem to support foreign direct investments (FDIs) and domestic direct investments (DDIs) in the state, as well as facilitating ease of trade.
He highlighted Penang’s economic performance, its aspirations and plans, talent development initiatives, and ongoing key infrastructure support.
Deputy Investment, Trade and Industry Minister Liew Chin Tong spoke about the National Semiconductor Strategy (NSS), announced by the Prime Minister recently.
“Malaysia has a small window of opportunity to develop itself into a dynamic, resilient and sticky supply chain that will bring more technology owners to invest and grow in the country.
“I congratulate the Penang Chief Minister for his and the state’s efforts in making Penang the choice location for the semiconductor industry.
“The development in Batu Kawan is particularly encouraging,” Liew said.
Maybank Global Banking Group chief executive officer Datuk John Chong emphasised the bank’s comprehensive understanding of the business landscape and clients’ needs.
“Our bank leverages its deep relationships and connectivity to introduce international investors to various markets across ASEAN.
“I am pleased to share that we continue to serve as a bridge, connecting the world to ASEAN and ASEAN to the world.
“By hosting Invest ASEAN in Penang, we bring together 145 local and foreign institutional investor clients, managing USD8 trillion in assets (assets under management), and 60 corporations from across ASEAN, with a total market capitalisation of USD146 billion.
“This event allows them to witness firsthand the advancements in Penang and consider potential investments,” he said.
Among the key participants present were Infrastructure, Transport and Digital Committee chairman Zairil Khir Johari, Malaysian Investment Development Authority Board member Prof Dr Ong Kian Ming, InvestPenang chief executive officer Datuk Loo Lee Lian, and Maybank Investment Bank chairman Dr Hasnita Hashim.
Story by Christopher Tan
Pix by Alissala Thian
Video by Siew Chia En