The MCA has come under fire for discrediting the Auditor-General's Report on the Penang government’s debt, although this has been reduced significantly since Pakatan Rakyat took over the state in 2008.

NONE In a statement, Chief Minister Lim Guan Eng (left in photo) also accused the MCA of being very desperate to tarnish the state's "good and clean" governance.

MCA president Dr Chua Soi Lek (right in photo) had reportedly disputed Pakatan's success in reducing Penang’s debts by 95 percent from RM630 million in March 2008, to RM30 million at the end of last year.

The remark had been attributed to Chua while he was on a recent working visit to the state, during which he attended a dinner in Bayan Baru organised by BN.

Lim contested the claim, pointing out that Penang’s achievement was due to the securing of “a water restructuring agreement with the federal government that was acceptable to the state government”.

water paips The federal government did not take over the water loans without cost, because the Penang government had to give up its water assets.

"The 95 percent reduction in Penang’s debt is the highest record in Malaysia," said Lim.

"No other state that has entered into the same water agreement with the federal government has succeeded in matching Penang’s reduction in the state debt.

"Reducing the debt and recording yearly budget surpluses are clear evidence of Pakatan's prudent and competent financial management that places Penang in a sound financial position.”

Unfavourable contrast

Lim further asked if MCA is suggesting that Penang should follow the federal government’s increasingly higher debt burden.

This now stands at RM504.4 billion, or a 89 percent increase from 2007 when it was RM266 billion.

Noting that this works out to RM18,000 for each of the 28 million citizens, he said the 89 percent increase in federal debt contrasts "unfavourably" with the Penang government’s achievement.

"The federal government debt would be higher still if we include contingent liabilities, or loans guaranteed to third parties, including the private sector," said Lim, adding that debt would then easily exceed RM620 billion.

"Fortunately Penang has no contingent liabilities because the state government does not guarantee any loans.”