Penang Chief Minister Lim Guan Eng said the proposed deficit of RM667.10 million in Budget 2017 will be supported by the state’s accumulated savings (reserves).

The DAP secretary-general was referring to the ninth deficit budget he tabled at the Penang State Legislative Assembly today.

Lim said the state government also estimated a deficit of RM230.31 million in Budget 2016 last year.

“However, the state recorded a surplus of RM71.78 million at the end of the 2015 financial year, and this contributed to the RM952.53 million in our reserves,” he said in his speech when announcing Budget 2017 today.

In a move to ward off criticisms over a deficit budget, Lim explained that the increase for 2017 may be abrupt, but it would not jeopardise the state’s operational expenditure.

He assured that all commitments and allocations for implementation of development projects, and ongoing social assistance under the state’s Equitable Economic Agenda will continue as promised.

Meanwhile, Lim noted that the allocations for two departments under PO1 (Chief Minister and State Secretariat offices) was the highest at RM707.61 million.

This amount had also raised eyebrows as the increase appeared to be high.

But Lim said the sharp hike was due to the increase in loan facilities, from RM100 million to RM639 million.

For the remaining seven departments, development allocation for 2017 remains about the same as for 2016.

The RM0.31 million allocation requested for the Botani department saw a reduction of RM1.63 million for the current year, from RM1.94 million last year.

Meanwhile, Lim set aside RM220 million for flood management to address the recurring situation in Penang.

This is on top of the RM150 million allocation approved by the federal government, which will be disbursed to the Drainage and Irrigation Department to start its flood mitigation projects in nine locations in Penang.

Lim said Penang continues to request for RM350 million for flood mitigation since 2008.

“Through the Penang Water Supply Corporation, we have allotted RM50 million to build the piping to divert water from the Air Itam Dam to the Teluk Bahang Dam,” he added.

“It is not true that one of the recent floods was due to PBAPP releasing water from the Air itam Dam."