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Just the beginning of the road

Jan 22,2017 - Last updated at Jan 22,2017

The Lower House of Parliament recently endorsed the 2017 state budget, and the budgets of independent state agencies and commissions, after several days of acrimonious and tortuous negotiations between members of parliament and the government.

The government expects to narrow the budget deficit this year to JD827 million, or 2.8 per cent of the GDP after receiving foreign grants. Before the grants, the deficit is expected to go down to 5.5 per cent of the GDP; it was 7.2 per cent in 2016.

The government said total revenues for government units is estimated to reach around JD1.666 billion this year, compared to the JD1.710 billion re-estimated in 2016.

Any means of reducing the soaring budget deficit is good, but the problem is knotty and needs much effort and drastic measures.

The deputies boasted that they worked to ensure that basic commodities were left untouched and that consumers will not be affected by price hikes.

The government, on the other hand, said it will take into consideration, and study the possibility of implementing, the MPs’ suggestions, which include unifying work permit fees for foreign workers, and requiring owners of cars with foreign licence plates to pay customs duties and sales tax after a certain period in the Kingdom.

It also said it will study the possibility of levying a JD1 monthly fee for each mobile phone line, make better use of rented and owned government buildings and dispense with unused facilities, and take measures to fix the taxation policy, taking into consideration low-income citizens.

Better late than never, but shouldn’t governments have looked into these issues much, much earlier? 

One government statement drew attention.

The minister of finance said that implementing the cuts suggested by the House Finance Committee will have a severe effect on the key health and education ministries.

Cutting back JD33.8 million from the running costs of government and independent entities will affect the activity of these two important ministries, he said.

Why reflect the cuts on these two ministries and not on others, less vital?

A veiled way of showing the risk of reducing the budget?

What about making more money available by cutting down on government expenses, rationing expenditure across the board, revisiting the budgets of ministries and independent government units, and applying some of the proposed austerity measures on them?

Be it as may, as long as the government appears determined to cut down spending, especially where it is not necessary, and to bring down the budget deficit, all is in order.

Moreover, the prime minister emphasised that the government will remain sensitive to the plight of the lower-income citizens and refrain from raising the prices of basic food items and other necessities, which offers a measure of relief.

 

The state budget is a serious matter and the country as a whole needs to come up with innovative ways of addressing its gaping deficit.

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