A fiscal burden

Despite all the noise made by government and Parliament about restructuring the independent governmental units, and abolishing some of them, the situation is unchanged, as revealed by the consolidated budget of the independent governmental units for 2014, prepared by the government and ratified by Parliament.

The aggregate revenue of those units during 2014 is no more than JD710 million, of which JD268 million represents cash subsidies from the Treasury, and JD67 million foreign grants. Thus, the net revenues achieved by all units will not exceed JD375 million, while their expenditure will reach JD1,632 million.

The deficit during 2014 will reach JD1,119 million after government subsidies and foreign grants, up to JD1,454 million before subsidies and grants.

The overall picture of the financial position of the governmental units is troubling. 

Of course, it may be unfair to put them all in one basket and pass a general judgement on them all. The situation of each unit should be studied separately to make sure that it is viable and feasible, and that the services it renders to the national economy and the society justify the cost that forms a burden on the public finance.

The fiscal deficit of the independent governmental units, of around JD1,119 million is slightly higher than the deficit of the central government itself, estimated to be JD1,114 million, thus raising the overall deficit of the whole public sector in 2014 to the  high level of JD2,233 million, equal to 8.6 per cent of the gross domestic product, estimated to be JD26 billion in current prices.

This is obviously a very high percentage that is neither acceptable nor sustainable, especially in a country implementing a programme of economic reform that focuses on public finance and debt.

Admittedly, some governmental units do make big profits, even though their revenues are only from taxes and licensing fees, not due to actual services.

Prominent examples are the Telecommunications Regulatory Commission and The Jordan Security Commission.

Such surpluses help cover the losses of other units, a state of affairs that makes it necessary to look at the results of those units separately, not collectively.

In order to understand the actual difficult financial position of the entire public sector, one should come up with an overall budget for both the central government and its offshoots, in the form of independent units.

Only in that case can one determine the real expenditure and revenue and the deficit of the public sector, as demonstrated by the collective picture.

Producing the overall fiscal picture is the first step in dealing with the situation, if the will to reform is there, especially on the part of the government, which showed readiness to take the most difficult decisions and whose objective is to serve the public interest, not to gain cheap popularity.

The best interest of the country calls for reducing the overall budget deficit and, consequently, reducing the need to borrow. 

At a bare minimum, the government needs to strictly implement the national economic reform programme without hesitation, and not to be tempted to carry on problems into the future, for other governments and generations.