Abdul Khalid (left) announced this when tabling a RM1.85 billion balanced budget for 2014 at the Selangor state assembly this afternoon.
"Coupled with the use of reserves for development spending (and the normal RM1.85 million budget), the state government is prepared to spend a total of RM2.28 billion for 2014," he said.
The RM430 million will be channeled into six projects, one being the already announced RM150 million third Klang bridge.
The other five initiatives are:
- RM100 million for affordable housing
- RM50 million for new schools
- RM50 million for entrepreneurship and youth development
- RM50 million for rural development
- RM30 million for women's empowerment
Last month, the Pakatan-led Selangor government backbenchers club had submitted a memorandum expressing concern about a possible reduction in development expenditure for budget 2014.
At first glance, their concerns appeared real after the development expenditure announced in budget 2014 today saw a slight reduction from RM633 million this year to RM624 million next year.
However, the additional RM430 million injection from state reserves brought the total development expenditure to RM1.055 billion - the highest ever.
The operational expenditure stands at RM1.225 billion.
At a press conference later, Abdul Khalid said this was the first time that Pakatan-led Selangor was incorporating part of the state reserves into the budget.
Selangor had last year announced a plan to use RM500 million from the state reserves for various projects, but the money was never spent and was returned, he added.
Abdul Khalid denied that the planned use of the reserves next year was due to pressure from his own state assemblypersons.
"No, it has been planned before this. But of course they (state assemblypersons) will want to know how the money will be spent so we will set up a mechanism for them (to give input)," he said.
He added that concerns expressed by Pakatan state assemblypersons that development expenditure would go down was merely a "misunderstanding".
"They thought that the estimated revenue for next year is only RM1.6 billion but it is RM1.8 billion which means there is enough money for development expenditure after deducting operational expenditure in a balanced budget," he said.
Despite the apparent concession, Abdul Khalid took his detractors to task for criticising the ballooning state reserves.
"Some are less wise about finance and fiscal discipline therefore there are voices threatening or complaining about the accumulation of the state reserves.
"We stress that maintaining the reserves coupled with prudent spending is consistent with fiscal discipline and as part of the long term finance management," he said.
He said that the state government had nowhere else to loan money and if it overspent it will need to go "begging" from the federal government.
Abdul Khalid also announced a number of measures on improving the state’s spending, including an independent action committee comprising of professionals.
He said among their task is to study the procurement and services cost of agencies as well as to develop a mechanism to control, and if necessary, cut unneeded expenditure for them, on top of solving red tape.
Furthermore, Abdul Khalid said a committee to improve the administration of state agencies and government-linked companies (GLC) will also be set up, to be chaired by the menteri besar himself.
The committee, comprising of top government officials, academics and professionals, will review the workings of state civil service and GLCs in line with international standards and oversee their implementation of policies.