Penang Chief Minister Chow Kon Yeow said the nation aspires Penang to be an economic powerhouse and a hub for the semiconductor industry but to do this he says there needs to be 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.
But the request could also stir some discomfort to Putrajaya if it was to peg state performance to tax collection and returning them to the states based on how much was collected. This would mean poorer state receiving less and economically stronger states only getting stronger while marginalising the others.
Penang should also realise that a stable Federal government means all parties irrespective of the states they represent are at peace and not feel sidelined just because their state contribute less compared to their colleagues.
Chow further claimed that revenue-sharing between the Federal and the states could be achieved by not only through Constitutional amendment but also through a change in policy.
Penang is requesting that 20% of the taxes collected by the Federal Government from Penang be allocated to the state government to enhance its development efforts. And has gotten the attention of Prime Minister.
The ball is PM’s court who will have to navigate this carefully as Sabah will also be watching with its own request of 40% revenue return. There is only so much in the till to share to everyone!
