Cut in subsidies mulled to bridge deficit gap
KUWAIT CITY, Aug 26: Less than three weeks after the Ministry of Finance announced a historic budget deficit of KD 10.8 billion for the 2020/2021 fiscal year – which is the highest in Kuwait’s history – as a result of decline in oil revenues by 42.8 percent and in non-oil revenues by 6.5 percent, the window of options for the government has become narrow. It now seems inevitable to reconsider increasing the fees for services and utilities, and reducing some subsidies in order to increase non-oil revenues and thereby reduce the deficit. According to reliable sources, the allowances for rent, unemployment and public aid will not be affected.
The intention is to increase fees for services provided by some ministries, albeit gradually and step-by-step, so that it does not impose a great pressure on those dealing with those ministries. The sources said the step to increase the fees has already come into effect in some ministries, including the Ministry of Justice, and it will soon happen with the fees of the Ministry of Interior, the Ministry of Social Affairs and the Ministry of Health.
They indicated that all these increases do not need new legislation or legal amendments. The sources denied any financial increases or cadres in any of the government sectors during the coming period. However, they revealed a study that is currently being conducted to regulate the beneficiaries of subsidized ration cards. They explained that the number of beneficiaries of the subsidized food items has reached two million and 163 thousand citizens as of May 2021. The total support for food and construction materials during the same month amounted to KD 13.7 million.
Meanwhile, the sources affirmed that the government will enter the next term of the National Assembly with a set of economic projects. They indicated the government’s intention to extend its hand to cooperate with the parliament in accordance with constitutional frameworks. Furthermore, MP Mubarak Al-Ajmi submitted a proposal to obligate the state to sell the empty land it owns to those entitled to residential care. The proposal stipulates that, “The residential and municipal welfare institutions shall undertake the sale of vacant land, taking into account the priority in registering applications, provided that the institution issues the decisions regulating the sale”.
In the explanatory memo, MP Al-Ajmi explained that his proposal comes in the context of seeking to address the increasing backlog of requests for housing welfare – a matter that has become an obsession for the two authorities – according to a serious mechanism and a realistic strategy based on studying the actual need for implementing residential projects and cities in accordance with the relevant laws. He said he is certain that his proposal would solve the housing crisis, and would speed up the process of completion of housing units within the proposed time period, as what is needed is an updated serious policy that confronts the economic reality of the costs of completing these projects and their completion times, which are essential to solving the housing problem. The Real Estate Union expressed its support for MP Al- Ajmi’s proposal. By Khaled Al-Hajri, Raed Yousef and Abdul Rahman Al-Shammari Al-Seyassah, Arab Times Staff