Penang Chief Minister Lim Guan Eng told his detractors to stop slandering his administration by saying that the state’s budget deficit has increased over the years.

Lim said the National Audit Report for 2014 showed that Penang's reserves have increased by 12.7 percent (or RM163.93 million) to RM1.45 billion in 2014, compared to RM1.29 billion in 2013.

The report is based on Penang’s financial statement, which has been verified by the auditor-general’s office, he disclosed.

He stressed that the report showed the state’s revenue had increased by 6.6 percent (or RM54.17 million) to RM880.75 million in 2014, compared to RM826.58 in 2013.

“Under the previous BN government, Penang's reserves were about RM800 million, but this has increased to RM1.4 billion under this administration,” Lim noted at a press conference in Komtar today.

“We hope certain quarters would stop slandering the state government that our deficit keeps increasing annually,” he added.

Lim has always said that Penang recorded surpluses of RM503 million from 2008 to 2014, exceeding the amount of RM373 million accumulated over 50 years, from 1957 to 2007, while the debt has reduced by 90 percent since 2008.

He said Penang’s financial outlook was strong compared to certain states which find it a challenge to pay the salaries of their civil servants.

Lim, however, declined to say which state he was referring to, saying: “We know which states, there is no need to say which ones, that have no money to pay their civil servants.

“What’s the point of talking so much in ceramah when they can’t pay their own civil servants? What is the point of talking about good values when they utter malicious and scandalous statements?” Lim asked.

“We are a good government, we not only speak but are prepared to serve, our performance speaks for itself,” he asserted.

No allocation

Lim said the state can continue to find resources to fund its activities although there was no allocation for Penang in Prime Minister Najib Abdul Razak’s 2016 Budget, announced in October.

He added that state governments have no power to borrow money and have to depend on their own financial resources.

“We can only borrow money from the federal government in Putrajaya, but we all know it will not lend us the money, it has no obligation to do so,” Lim lamented.

Lim said he cannot use the state’s reserves to pay compensation for projects halted by the state government as the funds are needed to pay its civil service and for implementing public programmes.

He noted that there are quarters who say that the state can pay the compensation of RM1 billion (for cancelled reclamation projects) as the balance would still be RM400 million.

Lim said his administration cannot halt the ongoing reclamation projects as this would “bankrupt” the state as the compensation would amount to RM1 billion.

“Our reserves cannot be zero or remain at RM400 million as our expenditure is about RM1 billion for next year.

“If our reserves are less, how can we find the money to run our programmes? This is an important point. Those who don’t understand prudent financial management, can talk as they like.”