THE Penang government has unveiled its 2025 Budget Strategies, stressing reforms to strengthen fiscal sustainability in light of ongoing economic challenges.
The Budget introduces the adoption of Zero-Based Budgeting (ZBB) to ensure that expenditure planning is grounded in current financial realities rather than historical spending patterns.
Chief Minister Chow Kon Yeow said the approach prioritises statutory expenses over non-statutory expenditures, aiming for a more practical and efficient allocation of resources.
“Alongside this, the state is committed to enhancing governance and integrity in financial management to improve the quality of service delivery.
“While continuing welfare programmes and public-oriented initiatives that align with the state’s fiscal capabilities, the government also plans to boost revenue through revised rates, the exploration of new revenue streams, and improved inter-agency collaboration.
“These measures are complemented by a firm commitment to financial prudence, with a focus on achieving optimal value for money and minimising wastage or financial leakages,” he said when tabling the Penang 2025 Budget at the Penang Legislative Assembly today.
The proposed operating expenditure for 2025 totals RM940.22 million, distributed across emoluments, services and supplies, asset management, grants and fixed fees, as well as miscellaneous costs. This marks a significant reduction of 10.19% from the RM1.047 billion budgeted for 2024.
The state attributed the decrease to a proactive effort to maintain a surplus in the Consolidated Revenue Account, which has seen a consistent decline from RM1.154 billion in 2019 to RM330.03 million in 2023.
Chow said development expenditure for 2025 is set at RM220 million, reflecting a 38.65% decrease compared to the 2024 allocation of RM374.71 million.
“The reduced allocation underscores the state’s focus on completing ongoing and high-impact projects.
“Non-critical new projects will be deferred or assigned token allocations to maintain financial flexibility, while strategic collaborations with Federal agencies will help avoid overlapping benefits and optimise resources.
“To meet the demands of the 2025 fiscal year, the government has set a revenue target of RM906.59 million, representing a 70% increase from the 2024 target of RM533.08 million. The projected revenue comprises tax collections (RM223.65 million), non-tax revenue (RM570.41 million), and non-revenue receipts (RM112.53 million).
“Despite these efforts, a modest deficit of RM33.63 million is anticipated – the lowest in Penang’s budget history. The state has taken into account an opening balance of RM50 million in its Consolidated Revenue Account on Jan 1 next year,” he said.
Chow emphasised that the state government would continue its pragmatic approach to balancing fiscal responsibility with developmental goals.
The forward-looking Budget is designed to secure long-term fiscal sustainability while delivering meaningful outcomes for Penangites.
Story by Christopher Tan
Pix by Darwina Mohd Daud, Muhamad Amir Irsyad Omar and Adleena Rahayu Ahmad Radzi