GEORGE TOWN: The Penang government today tabled an operating budget of RM1.074 billion for 2027, projecting a deficit of RM5.62 million — the lowest shortfall in the state’s fiscal history.
Chief Minister Chow Kon Yeow said the figure marked a significant reduction from the RM19.92 million deficit projected for 2026, supported by steady revenue estimates and fiscal discipline.
Tabling the 2027 Penang Budget at the state legislative assembly, Chow said the state expected to collect RM1.069 billion in revenue next year, an increase of RM800,000 or 0.07 per cent from 2026.
Non-tax revenue accounts for the largest share of state receipts at RM566.11 million (52.96 per cent), derived mainly from land premiums, special charges and investment interest.
Non-revenue receipts are projected at RM277.79 million, while tax revenue is expected to contribute RM224.94 million.
“Taking into account the estimated revenue of RM1.069 billion against an estimated operating expenditure of RM1.074 billion, the 2027 Penang Budget reflects the lowest estimated deficit in the history of Penang’s state budgets,” he said.
Of the RM1.074 billion in operating expenditure, fixed charges and grants account for the largest portion at RM607.96 million (56.58 per cent).
This is followed by emoluments at RM231.8 million (21.58 per cent), services and supplies at RM219 million (20.38 per cent), other expenditure at RM11.38 million (1.06 per cent) and asset acquisitions at RM4.32 million (0.4 per cent).
The higher allocation for services and supplies — up by RM17.47 million or 8.67 per cent — was driven by the national minimum wage adjustment from RM1,700 to RM2,000 taking effect in June 2027, impacting state cleaning, maintenance, and security contracts.
Separately, the state has approved RM280.17 million in development expenditure for 514 projects next year, a 12.1 per cent decrease from the RM318.57 million allocated in 2026.
Chow said priority would be given to critical public connectivity projects and strategic long-term infrastructure.
“Among these are land acquisitions for the Mutiara Line Light Rail Transit (LRT) project, the Airport Link Road, access routes connecting to Silicon Island, Gurney Bay Phase 2, and broader components of the Penang Transport Master Plan (PTMP),” he added.
Chow said civil works under Package CMC1 of the Mutiara LRT line, covering a 23.7km stretch from Komtar to Silicon Island, had reached 15.5 per cent completion as of September 2026, with full operations scheduled for December 2031.
Other key measures announced in the budget:
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Welfare and social safety: The i-Sejahtera programme will retain its RM58 million allocation. A new Program Mempelai Emas will offer a one-off RM500 wedding gift to newlywed couples, while the state will establish its first Social Development Fund with an allocation of RM350,000.
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Public transport subsidies: A total of RM16.8 million has been allocated to subsidise public transport through Pas Mutiara and free CAT bus services. A new one-off RM600 incentive for eligible e-hailing drivers has been introduced, with an allocation ceiling of RM9 million. Taxi drivers and school bus operators will continue to receive assistance totalling RM1.2 million.
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Quit rent relief: The state will retain the 50 per cent rebate on quit rent in 2027, subject to eligibility criteria.
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Industrial and technology ecosystem: Sales of industrial plots at the 700-acre Green Tech Park on Silicon Island will begin in the first quarter of 2027, with the first production facility expected to begin operations by 2028.