Control Over Subsidies And Expenses An Urgent Need

The current supply of cash is in the near depletion stage and quick financial solutions must be sought, local Arabic daily Al Rai reported quoting reliable sources. The daily however mentioned that the levels of liquidity available in the General Reserve Fund are sufficient to cover major expenditures for more than a month, including salaries and subsidies.

Quoting government sources the daily suggested that the public debt bill would be passed by decree of necessity in the near future, due to its financial importance for the public budget. However, dealing with the liquidity crisis necessitates different solutions, which must be adopted in the short, medium and long term. Several official proposals were discussed recently, the last one of the higher committees is the following recommendation, including dividing Kuwaitis based on their income, and allowing government agencies to decide their budget.

The government agency involved in developing solutions to address the escalating public budget deficit has recommended not providing all measure of benefits to all citizens, in terms of the subsidies, and the fees that they must pay to the state. The citizens must be separated into segments, while clearly defining low-income segments of Kuwaitis. The sources indicated that there is currently no distinction between a high-income citizen and a low-income citizen. All citizens access the same subsidies, including low costs for health care, supply and construction goods, housing loans and other services at the same prices. The proposed proposal ensures that citizens are classified according to income.

When discussing the details, the breakdown should be according to the type, rate and amount of income, so that a distinction is made between a citizen who depends on a limited salary or a low income, and another who receives a salary equivalent to 10 times of what the first citizen gets, in addition to other investment income from his own business. This classification will also protect the deserving citizen as he requires the subsidy program, and it will not impact the other citizen who has multiple incomes and cash flows that make government support unnecessary.

Of course, any move in this regard has to include developing a report of the limited income Kuwaitis, instead of generalizing all Kuwaitis. The daily said, quoting sources, that there are clear and specific standards in every country, even the advanced ones to judge and measure the income levels, and change the setting if the state desires or finds there is a need to raise the income ceiling for a low-income person.

In addition, the proposal mentions that subsidies should be redirected to eligible citizens while financial obligations in the form of fees or what is agreed upon to be named should be imposed later, so that the services provided are codified in a fee structure. Exempting all citizens from the full fees is questionable as it leads to the failure to treat citizens accordingly, and distinguish between those who need to benefit from state services and others who can do without.

As for the second recommendation, the proposal calls for leaving the process for streamlining the budgets of government agencies to the respective ministries and entities, meaning that the government does not have to directly interfere in the plans of ministries and government.

The idea is for the government to meet with all its agencies and ministries and ask them to develop a specific vision to ensure they reduce their expenses, provided that each party provides solutions for that, according to its priorities and urgent needs for the optimal use of the finances required by its sector.

The daily said, quoting sources that these recommendations are only part of preliminary proposals, and in order to benefit from them, they must be enforced instead of just being discussed upon in committees.

 

Source: Timeskuwait

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