Lim Guan Eng urges PM to repay Penang RM2.8b ‘shortfall’ and overhaul state funding formula

Lim Guan Eng urges PM to repay Penang RM2.8b ‘shortfall’ and overhaul state funding formula



The DAP national adviser said Penang received less in federal allocations than it contributed between 2023 and 2025, and urges the government to adopt a formula that ensures fairer distribution among states. — Picture by Sayuti Zainudin

Wednesday, 01 Jul 2026 12:24 PM MYT


KUALA LUMPUR, July 1 — DAP national adviser Lim Guan Eng today urged Prime Minister Datuk Seri Anwar Ibrahim to return what he described as a RM2.8 billion shortfall in federal allocations to Penang and introduce a new funding formula to ensure states are treated more equitably.

In a statement, the Bagan MP argued that Penang had received less in federal allocations than it contributed to the federal government between 2023 and 2025, citing figures disclosed by Anwar in Parliament.

“Prime Minister Datuk Seri Anwar Ibrahim should work out a justice for all formula in compliance with the constitutional right of equality before the law, to immediately return Penang’s shortfall in Federal Government’s allocations of RM2.8 billion from 2023-2025 as compared to Penang’s contributions to stop Penangites from being shortchanged,” he said.

According to figures cited by Lim, Selangor contributed an average of RM43.6 billion over the period and received RM15 billion in allocations, while Johor contributed RM14 billion and received RM16 billion.

Penang contributed RM10.7 billion but received RM7.9 billion, while Kedah contributed RM3.7 billion and received RM9.5 billion.

Lim said Selangor and Penang were the only two states that received less than they contributed to the federal government during the period.

“There is no justification for Penang to receive less than Kedah when Penang contributes much more to the federal government,” he said.


He called on the federal government to immediately make good the RM2.8 billion difference, arguing that Penang’s residents should not be disadvantaged despite the state’s contribution to the national economy.

Lim also framed the issue in political terms, saying Penang’s support for the unity government should be recognised.

“To reciprocate Penang’s 1.8 million people’s strong support for the Prime Minister and the unity government, Anwar should immediately return the shortfall of RM2.8 billion over the three-year period from 2023-2025,” he said.

He warned that failing to do so “would create a sense of grievance amongst Penangites that their support for Anwar and the unity government is not appreciated and taken for granted.”

Lim also urged the government to establish what he described as a “formula of justice for all” to ensure Penang would not be “shortchanged” in future allocations to states.

Earlier today, Penang Chief Minister Chow Kon Yeow also called for a fairer return of federal revenue, but stressed that the state was “not seeking special treatment, but equitable revenue distribution based on its actual contribution to national development.”

Welcoming Anwar’s disclosure of state contribution and allocation figures in Parliament, Chow said the data confirmed Penang’s role as “one of the country’s main engines of economic growth” and a net contributor to federal revenue.

He also thanked the federal government for backing major infrastructure projects in the state, including the Mutiara Line LRT, the expansion of Penang International Airport and flood mitigation works.