Penang Tables RM1.09 Bln Budget 2026 With Record-Low Deficit

GEORGE TOWN, Nov 14 (Bernama) -- The Penang state government today tabled the Budget 2026 totalling RM1.088 billion for operating expenditure, with an estimated deficit of RM19.92 million, the lowest in the state’s history. 

Chief Minister Chow Kon Yeow said the operating expenditure for Budget 2026 rose by RM147.72 million, or 15.71 per cent, compared to Budget 2025, which amounted to RM940.223 million. 

He said that of the total amount of RM1.088 billion, RM1.051 billion was allocated for supply expenditure and RM37.07 million for charged expenditure. 

"A total of RM226.73 million or 20.84 per cent of operating expenditure comprises emoluments; services and supplies (RM200.51 million, 18.43 per cent); assets (RM3.59 million, 0.33 per cent); grants and fixed fee charges (RM645.73 million, 59.35 per cent) and other expenses (RM11.38 million, 1.05 per cent). 

“The increase in emoluments of RM19.19 million or 9.25 per cent is due to the implementation of the second phase of the Public Service Remuneration System (SSPA), while the increase of RM6.58 million (3.39 per cent) in services and supplies is due to the increase in the minimum wage policy,” he said when tabling the budget at the Penang State Legislative Assembly (DUN) here. 

Chow said the estimated operating expenditure also includes contributions to the State Development Fund (KWPN) of RM265 million to cover Penang’s 2026 development expenditure commitment of RM318.62 million. 

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He said the state government’s main focus for 2026 is on high-impact projects with strategic importance, including land acquisition for the implementation of the Mutiara Line Light Rail Transit (LRT) project, Gurney Bay Phase 2 project, the development of Silicon Island, as well as extension projects under the Penang Transport Master Plan (PTMP). 

Besides new projects, he said 122 continuation projects have been listed for next year, including several development categories such as public infrastructure, community facilities and special economic projects. 

He said the state government aims to collect RM1.068 billion in revenue, with a breakdown of tax revenue at RM269.78 million, non-tax revenue (RM699.69 million) and non-revenue receipts (RM98.56 million).

Chow said the 2026 revenue is projected to increase by RM161.44 million or 17.81 per cent compared to 2025.

“The state government expects an increase in tax revenue, especially direct taxes, through the new land tax rate starting in 2026, but the state government will introduce land tax rebates to ensure that landowners are not affected by the new rate.

“The Budget 2026 is expected to post the lowest deficit in the history of the Penang state budget, which amounts to RM19.92 million compared to the estimated deficit in 2025 of RM33.63 million,” he said. 

-- BERNAMA