Penang Chief Minister Lim Guan Eng wants more equality and fairness in the distribution of federal funds to the state government to be commensurate with the tax revenue collected from this island state.

"The federal allocations for development funds and annual grants must be balanced and equal, which is not the case now," he said in a press statement yesterday.

anwar ibrahim speech in penang 061208 lim guan eng According to his statement, the federal government had set aside RM8.965 billion for development funds and some RM700 million in grants to the state government over the last eight years.

However, according to a recent parliamentary reply from Finance Minister Najib Abdul Razak, Penangites have contributed RM15.619 billion in taxes between 2001 and 2007.

"This is not proportionate, fair or balanced. Penangites have contributed nearly twice in taxes compared with the federal funds returned for the state development and operations," lamented Lim.

He has called on the federal government in several parliamentary sessions to address the issue.

According to Najib's reply, the federal government development funds allotted to Penang were RM604 million in 2000, RM744 million (2001), RM930 million (2002), RM849 million (2003), RM779 million (2004), RM797 million (2005), RM1.584 billion (2006), RM1.222 billion (2007) and RM1.456 billion this year.

Some 593 projects were carried out and completed under the Eighth Malaysia Plan (8MP) in Penang, while another 203 projects were carried forward and completed under the Ninth Malaysia Plan (9MP).

federal govt funding for penang 151208 A further 827 projects were also carried out under 9MP in Penang.

Between 2001 and 2007, some RM15.619 billion tax revenue had been collected from Penang, comprising RM8.585 billion in company or corporate tax, RM4.863 in personal tax and RM2.17 billion in other forms of taxes.

Between 2001 and last year, number of Penang tax-payers have increased considerably from 27,077 to 38,286 for company or corporate tax, 365,176 to 467,187 for personnel tax and 13,410 to 18,732 for others.

The federal government development funds and grants exclude the federal annual allocation channelled to various ministries and government departments and agencies.

Federal allocation slashed

Lim felt the lopsided financial returns to Penang should be addressed and rectified.

penang outer ring road project 250608 Previously, Lim had lashed out at the Putrajaya administration for slashing funds and revoking vital projects for Penang during the Mid-Term Review of the Ninth Malaysia Plan (9MP).

The cancelled projects were the RM2 billion monorail, RM1.5 billion Penang Outer Ring Road (Porr) and RM1.1 billion Mengkuang Dam expansion projects.

Penang's original allocation under the 9MP was RM6.152 billion or 3.1 percent of the total RM200 billion budget.

But after the review, its share was slashed to RM1.452 billion, constituting only 0.6 percent of the increased total allocation of RM230 billion.

Lim, the DAP secretary-general, said this was punitive action by the Barisan Nasional federal government on Pakatan Rakyat-led states.

He has demanded that the federal government pays cash compensation for the cancelled projects, to enable the state government to implement projects for the benefit of Penangites.

The chief minister has also sought some RM1 billion in federal funds to carry out flood mitigation projects in Penang.