Subsidies cut, hike in petrol prices mulled in plan to increase revenues.

Economic panel to trim ‘living support’

It seems that the government’s “scalpel” that was supposed to be used for trimming down the public budget is expanding to cut down living support in an effort to increase state revenues in the face of the historical budget deficit, reports Al-Rai daily. In this regard, informed sources explained that the Cabinet’s Economic Committee recently studied new ideas for reducing government subsidies, which amount to nearly KD 4 billion annually. These new ideas included canceling the health insurance contract, which costs the state about KD 154 million annually.

The proposals also include one that recommends to stop supporting Kuwaiti employees who earn monthly salaries of KD 3,000 and above. There is another proposal that supports limiting the endowment of employment to those whose monthly salary is KD 7,000. In practice, “Afia” or reducing the number of beneficiaries of employment support were not the only proposals discussed by the Economic Committee. An open discussion held by the committee included canceling, or at least limiting them to the lowest possible number, official functions and the participation of government agencies in exhibitions, international conferences, seminars, workshops (local and abroad), training programs, hospitality, parties, sponsorships and gifts. This is to be done in a way that achieves the public interest and is imposed by the urgent need of the state or government agency.

This trend includes hospitality and government delegations’ travels to participate in Gulf, regional and international events that the majority of officials are keen to attend, usually with escorts of different job levels and sometimes with up to five people. Of course, this “package” entails significant expenses that include costs for hotel stay, food, local transportation, and travel allowances. These are classified under general expenses in the budgets of ministries and government institutions. According to preliminary estimates, stopping expenses for hospitality, training, local and abroad conferences, and official missions provides an estimated KD 300 million (about one billion dollars), taking into account the amount spent by ministries and government departments on these items in the 2018/2019 budget before COVID-19 pandemic was about KD 130 million.

These sums were distributed at KD 40 million for hospitality expenses, KD 36 million for training, KD 10 million for overseas conferences, and KD 43 million for official missions. The expenses of attached and independent government agencies on these items, which are considered higher than their counterparts in ministries and government departments for the 2018/2019 fiscal year, amounted to between KD 300 million and KD 400 million. In addition, there are proposals to reduce some services of the Ministry of Defense, and stop or limit the travel of officials on official missions on government planes as well as reduce the cost of maintaining these planes. The daily, in its Tuesday issue, had revealed a number of scenarios related to the “belt tightening” policy aimed at reducing the living support by about KD 2 billion. It was proposed to exclude from the ration card those people who receive salaries of KD 3,000 and above, provided that this includes the ration card of the head of the family and its members.

The proposals also include one to reduce the percentage of shares provided by the state to support the cost of living, the cost of which per person ranges between KD 5 to KD 6 per month, by reducing the ceiling for subsidizing food supplies. There is also a proposal to abolish the shares of domestic workers, which constitute 16 percent of the number of beneficiaries of the supply, with about 471,000 beneficiaries. Meanwhile, there is a discussion on the sideline to allocate a maximum of two housemaids and a driver on the ration card of the head of each household. There is no official data on the size of savings that can be recorded from the ration because there is no inventory in this regard. In the event that people who receive salaries of KD 3,000 and above are excluded from the ration card, the shares are reduced in general, and the shares of domestic workers are canceled, the reduction would be about KD 10 million annually, according to preliminary estimates. The expenditure on food supplies during the last fiscal year amounted to about KD 114 million. The Economic Committee is proposing to reduce the subsidy for some fuel products, specifically gasoline, by raising its price by 5 fils per liter, in addition to reducing the electricity subsidies.

Source- Arab Times.


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