Cabinet close to finally endorsing draft budget

Ministers will wrap up three-week deliberations on the country’s draft 2017 budget and endorse a fiscal plan for the first time in 12 years

Lebanese deputies cast their votes during the election session at the parliament in Beirut May 25, 2008.

Lebanese deputies cast their votes during the election session at the parliament in Beirut May 25, 2008.

REUTERS/Nabil Mounzer

10 March 2017

BEIRUT: The Cabinet is set to meet Friday amid growing hopes that ministers will wrap up three-week deliberations on the country’s draft 2017 budget and endorse a fiscal plan for the first time in 12 years, ministerial sources said Thursday.

“I expect the draft budget to be approved during tomorrow’s [Friday] session before sending it to Parliament,” Labor Minister Mohammad Kabbara told The Daily Star. “The Cabinet will finalize Friday the remaining budget provisions, including allocations for some ministries.”

Economy Minister Raed Khoury was cautiously optimistic about the Cabinet’s endorsement of the draft budget, saying another session might be needed before the fiscal plan could be ready to be sent to Parliament for discussion and final ratification by lawmakers.

“We are still discussing allocations for some ministries, in addition to tax reform proposals. We might finish the discussions tomorrow [Friday], or we might need another session,” Khoury told The Daily Star.

He said that the Cabinet’s deliberations did not cover the public sector’s controversial salary hike bill that is currently being examined by joint parliamentary committees.

Ministers said a deal to include the cost of the salary scale bill into the state budget has been reached, while a draft law on revenues and proposed taxes to cover the cost has been referred to Parliament.

Finance Minister Ali Hasan Khalil, who has estimated the cost of financing the salary scale bill at LL1.2 trillion ($800 million), has proposed a series of taxes to cover it, provoking wide condemnation from ministers, lawmakers, labor unions, banks and private businesses.

Joint parliamentary committees Thursday wound up discussions on the public sector’s salary increase bill and referred it to Parliament’s general assembly as Speaker Nabih Berri has called for a legislative session on March 15.

“The committees have accomplished studying the salary scale bill and referred it to Parliament’s general assembly for ratification,” MP Ibrahim Kanaan, the chairman of the parliamentary Finance and Budget Committee, said after the meeting. “The committees abided by the cost [of the salary scale bill] agreed upon by political blocs and there was no increase to what had been agreed.”

Kanaan said the committees agreed to grant one grade salary increase to corporals, two grades to civil servants and three grades to secondary school teachers.

The committees Wednesday approved a salary scale for the military, but without agreeing on a similar salary scale for public and private school teachers. Education Minister Marwan Hamadeh walked out of Thursday’s meeting in protest at what he called a “lack of fairness to teachers.”

“The salary scale was probably fair to the [public] administration and the military sector. But it is unacceptable to marginalize the teacher in all stages,” Hamadeh told reporters in Parliament after leaving the meeting. He vowed to defend the salary increases for school teachers. “I hope that the academic year, [official] examinations and the salary scale will not be scuttled.”

Kataeb Party chief MP Sami Gemayel, who has staunchly rejected the proposed taxes to finance the salary scale bill, said: “We have rejected the proposed revenues. The salary scale bill must be financed. We all support financing it and rights must be given [to its owners][. We will vote for the bill.”

Gemayel lashed out at those “who are destroying the state with squandering [of public funds] and corruption.” He cited a report claiming $2.4 billion in tax evasion.

Ahead of the committees’ meeting, government secondary school teachers decided Thursday to begin an open-ended strike in all government schools starting Friday to protest what they called a “disregard of the teachers’ rights.”

“The leaks [on the salary scale] coming out of the joint parliamentary committees’ meetings are unfair to the secondary school teachers and their employment positions,” the teachers said in a statement.

Berri, who chaired a meeting of Parliament’s Secretariat Thursday, decided to call for a legislative session on March 15 that might include on the salary scale bill on its agenda.

“There are several items [on the agenda], including draft laws for agreements and bills relating to the amendment of some articles in a number of laws. There are also urgent draft laws,” Deputy Parliament Speaker Farid Makari told reporters after the meeting held at Berri’s Ain al-Tineh residence.

He said if the committees ended their discussions Thursday evening, the salary scale bill would be listed on the agenda of Parliament’s general session.

Parliament’s final ratification of the 2017 draft budget is seen as pivotal for controlling state finances and shoring up the battered economy, burdened by a more than $74 billion in public debt. Lebanon has not ratified a state budget since 2005 due to political wrangling between rivals, leading to uncontrolled extra-budgetary spending in the billions of dollars.

Ministers have been seeking to end budget talks to move on to the sensitive and thorny issue of a new electoral law amid sharp differences between rivals over which voting system to adopt for the parliamentary polls, slated for May 21.

Meanwhile, Lebanese Forces chief Samir Geagea said Lebanon would soon have a new electoral law for the upcoming elections after the ratification of the draft budget.

In a departure from his threat last week to withdraw his three ministers from the Cabinet unless the government decided to privatize electricity production, Geagea demanded that the draft budget be laced with reforms.

“The presence of a Cabinet is better than its absence. The [draft] budget is being studied for the first time in 12 years. We will not approve the budget unless it was accompanied by reforms,” Geagea said at an LF rally at his residence in Maarab during which he announced that Fadi Saad would be the party’s candidate for parliamentary elections. Saad will be running for the Maronite parliamentary seat in North Lebanon’s Batroun district, replacing current LF MP Antoine Zahra who has decided to bow out.

“Sooner or later we will reach an electoral law,” Geagea said. “We will only accept holding elections and the approval of a new electoral law. We will reach new parliamentary elections.”

© Copyright The Daily Star 2017.

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