MPs pass budget with deficit of KD 6.7bn, higher spending

Finance minister survives no-confidence vote, Amir sends congratulations

KUWAIT: The National Assembly yesterday passed the 2019/2020 budget which projects a KD 6.7 billion deficit for the fifth year in a row as a result of the crash in oil prices in mid-2014. During the Assembly’s last session for the current term, Finance Minister Nayef Al-Hajraf survived a no-confidence vote by 32 votes against 16 following last week’s grilling for not abolishing interest rates on loans taken by pensioners from the social security agency.

KUWAIT: Surrounded by MPs and ministers, HH the Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah greets Finance Minister Nayef Al-Hajraf (left) at the National Assembly yesterday. – Photo by Yasser Al-Zayyat

Revenues in the 2019/2020 budget, which began on April 1, are projected at KD 15.8 billion, most of them from oil, while spending is estimated at KD 22.5 billion, over two-thirds of which are for wages and subsidies. Oil income is projected at KD 13.85 billion, calculated at $55 a barrel. The income from oil makes up some 88 percent of total public revenues.

Head of the budgets committee MP Adnan Abdulsamad warned the country is faced with major challenges, adding that even if the government imposes taxes and raises charges on public services, it will not be able to bridge the budget shortfall. The persistent budget deficit comes after 16 years of surpluses during which Kuwait built assets worth over $600 billion managed by Kuwait Investment Authority (KIA), mostly outside the country (the returns of which are not included in the budget).

Also, according to Kuwaiti law, 10 percent is deducted from revenues every year regardless of whether there is surplus or deficit in favor of the Kuwait Fund for Future Generations. This year’s contribution is KD 1.58 billion. The budget was passed by 36 votes in favor with 20 against. During the debate on the budget, MPs called on the government to stop squandering public funds and to employ more Kuwaitis.

Following the renewal of confidence in the finance minister, Hajraf thanked the Assembly and said he will continue to serve the country and the people. But he warned against what he called a “deviation” in the debate of grillings, which could undermine democracy. Before the voting, two lawmakers spoke in favor of the motion and two others defended the minister. MP Nayef Al-Merdas said he did not hear the minister promise to scrap interest on loans taken by pensioners. The minister was grilled twice last month over alleged violations and squandering public funds.

HH the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah yesterday sent a cable to Hajraf, congratulating him on the renewed confidence. He commended the minister’s efficient performance while replying to parliament queries, along with the elevated democratic practice which reflected the civilized image of the dear homeland. HH the Amir wished everybody success in serving the dear nation. HH the Crown Prince Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah sent a similar cable to Hajraf, and wished everyone success in serving the dear nation under the leadership of HH the Amir.

The Assembly also unanimously voted to refer the outcome of four investigations to the public prosecutor for legal action. These include probes on alleged violations at Al-Zour refinery, violations at the health ministry, illegal distribution of state-owned agricultural land and severe damage by heavy rains last year.

Moreover, the financial status of the country was discussed in a closed session as demanded by the government to provide MPs with information about the performance of Kuwaiti assets abroad. At the end of the debate, speaker Marzouq Al-Ghanem said it was decided to refer the issue to the Audit Bureau. At the end of the session, Ghanem closed the current term of the Assembly until the end of October.

By B Izzak

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