x Abu Dhabi, UAEWednesday 17 January 2018

FNC divided over 6% budget cuts

Federal National Council members across the Emirates are coming to terms with a proposed six per cent cut in a federal budget which will be allocated over three years.

Federal National Council members across the Emirates were coming to terms yesterday with a proposed six per cent cut in a federal budget which will be allocated over three years.

Some believe cuts will harm health and education while disproportionately affecting the Northern Emirates, while others praised the long-term planning for increasing accountability in Government.

Yousef al Neaimi, a member from Ras al Khaimah, said he was surprised at the need for cuts, because, he said, the UAE is a prosperous country and should spend more to stimulate the economy during a financial crunch.

"The zero-based budget that we will now implement for three years means we have stopped everything. No new projects, no growth," he said.

The Cabinet's proposed budget for 2011-2013 marks the first time the country has introduced a three-year plan for federal spending. Spending for 2011 is projected to be Dh41 billion, down from Dh43.6bn in 2010. "Zero-based" means every expenditure has to be justified. The budget allocates Dh122 million to federal ministries and bodies over the three years.

Dh19bn - 46 per cent - will be allocated to primary and secondary education, health, pensions, social assistance, the Sheikh Zayed Housing Programme and the Marriage Fund, a key demand of the FNC. The figure is up from 41 per cent last year - Dh17.8bn - but the specific amounts allocated to the ministries have yet to be debated.

The three-year scope of the budget "sends a signal of stability and clarity for three coming years", said Ahmed al Dhaheri, the deputy FNC speaker from Abu Dhabi.

But FNC members were split. Some believed the cuts to be a result of the mismanagement of finances by some ministries. In last year's budget session, said Obaid al Tayer, the minister of state for financial affairs, several major ministries misspent.

The cuts will target wasteful spending, said Mohammed al Zaabi, of Sharjah. "I don't think it will impact services," he said, "and salaries would likely not be touched. I think when the minister of financial affairs saw there was unjustified spending, he took the step and got the Government to take that step."

It was argued the cuts were an inevitable "correction" resulting from the financial crisis.

"We are going through a global crisis and there has to be a sort of correction or limit," said Ali al Matroushi, a member from Ajman and chairman of the defence and home affairs committee.

The cash-poor Northern Emirates, which already suffer from unreliable electricity supply, will be disproportionately hit, he said.

The overall cuts make increases to the salaries of doctors and teachers unlikely. "This means there is no intention to raise salaries of doctors and teachers, and this needs a solution," said Sultan al Muezzin, a member from Fujairah and chairman of the health, labour and social affairs committee.

"It will definitely impact the services ministries," said Ali Jassim, the second deputy speaker of the FNC, with higher education in particular being hit.

"You have the Higher Colleges of Technology for instance, which have services and yearly programmes and the students increase, and Sheikh Nahyan [the Minister of Higher Education] has been complaining since 2007 about the budget," he said.