The government approves the 2021/2022 draft budget: increasing the “wages” allocations and working to raise pensions


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The Council of Ministers, during its meeting today, headed by Dr. Mustafa Madbouly, approved the draft budget for the next fiscal year 2021/2022, which was presented by Dr. Mohamed Maait, Minister of Finance In preparation for presentation to Parliament.

The Minister of Finance discussed the principles, frameworks and objectives governing the preparation of the budget, which included continuing efforts to maintain balanced financial stability in light of the repercussions of the Corona pandemic, and efforts to support and stimulate economic activity without prejudice to the sustainability of budget and debt indicators, by reducing the total deficit to about 6.6. % Of GDP, and achieving a primary surplus of 1.5% of GDP to ensure the stability of the budget system debt as a percentage of GDP by the end of 2021/2022.

Dr. Mohamed Maait added: The budget for the next fiscal year includes continuing to support and support the productive sectors and groups most affected by the Corona pandemic, in conjunction with the continuing efforts to improve the quality of the infrastructure, and to ensure that the broadest segment of society benefits from improving services and the quality of facilities, in addition to Supporting specific initiatives and taking measures to enhance the fields of human development, especially the health and education sectors, as well as supporting some national projects, such as improving services and infrastructure in Egyptian villages, improving the quality of drainage networks and canals throughout the Republic.

The Minister of Finance added that the governing foundations, frameworks, and objectives also include the continuation of the policy of proper pricing of goods and services to ensure the efficient allocation of resources and uses, the expansion of preparation and follow-up of the budget on the basis of the budget of programs and performance, and the follow-up of specific initiatives with clear goals that can be measured to ensure the efficiency and quality of public spending Working on expanding the tax base, and maximizing the return on state assets by increasing the surpluses transferred to the public treasury.

Dr. Mohamed Maait discussed the most important economic assumptions in the medium term, which included, among other things, the growth rate of the GDP, which estimated at 5.4%, and the objectives of the state’s general budget, indicating that it included maintaining the sustainability of fiscal discipline and government debt by achieving stability. The debt of the budget agencies, in a way that contributes to the continued control of debt rates during the critical period associated with the Corona pandemic, which is a basic and main requirement to maintain the evaluation of international institutions and institutions of good and positive credit rating of Egypt, in addition to creating additional financial space to finance the growing needs of the state, and reduce the budget deficit And working to achieve a first surplus of about 1.5% of the GDP, compared to estimates of a first surplus for the current fiscal year of about 0.9% of the product during the current fiscal year.

The Minister of Finance added that the goals also included support and support for economic activity, especially the industrial and export sectors, and the most important initiatives and related programs, including the initiative for cash payment of arrears to exporters, support and burden recovery programs for exporters, and the national project to replace vehicles to run on natural gas instead of diesel and gasoline, in addition to Promoting social protection efforts and improving the standard of living of citizens, and the most important programs and initiatives related, by increasing wages and remuneration for workers, continuing to finance the degrees necessary for the promotions of workers in the state, and providing the necessary financial allocations to grant incentives and transportation allowances for workers transferred to the Administrative Capital, and work to increase Pensions to ensure that there is also a real increase in the incomes of more than 10 million pensioners, and to provide the necessary allocations to support food commodities, and to finance the Takaful and Karama program, and the national project for the development and development of the Egyptian countryside within the “A Decent Life” initiative.

The Minister of Finance indicated that the goals also include focusing on areas of advancing human development through a set of financial benefits for some vital functional sectors, especially health and education.

The minister explained: We aim to continue to grow budget revenues at rates higher and faster than the annual growth rate of expenditures to continue reducing the gap between total expenditures and budget revenues, and the overall picture of budget revenues indicates an improvement in the proportion of tax revenues from non-sovereign bodies due to the ongoing reforms on the policy and tax administration side, as well as an increase In the value of revenue from sovereigns.

He pointed out that in light of the expectation of gradual improvement, and taking into account the impact of the reforms that have been implemented so far, it is expected that the outcome of budget revenues will reach about 1.3 trillion pounds, according to estimates for the next fiscal year 2020/2021, compared to expected revenues of 1.117 trillion pounds during the year. The current financial system, which reflects an annual growth rate of 16.4%, through expanding the tax base, activating electronic collection and payment, expanding the use of modern methods of risk management, collecting government revenues, and working to increase linking the proceeds with economic activity.

The revenue enhancement will also depend on improving tax administration, by unifying and automating procedures for all tax interests, and requiring large and medium financiers and self-employed professionals to electronically automate payment and collection processes with the general budget apparatus, as well as expanding the activation and application of the simplified tax system for micro and small companies and some Categories of the tax community, as well as maximizing the return on state assets by adopting sound economic policies, the most important of which is proper pricing to cover the cost of making goods and services available, and dealing with financial entanglements to achieve a gradual improvement in the financial conditions of state agencies, and the expansion of partnership programs between the public and private sectors in investment fields And management of state assets.

The minister reviewed the allocations for the purchase of goods and services, pointing out that they are sufficient to pay the dues of the public budget bodies for the benefit of the electricity sector, as well as allocations sufficient to pay the funds for water, medicine and school food, in addition to the approval of allocations for maintenance.

He pointed out that the next fiscal year will witness continued control over the interest payments bill, which will contribute to an improvement and a decrease in the rate of interest payments to the GDP and to the total budget expenditures.

With regard to the section on subsidies, grants and social benefits, the minister referred to work to provide adequate financial allocations to pay the treasury’s obligations in favor of the pension funds, as well as to pay the obligations of subsidy commodities, and to increase the allowances for treatment at the expense of the state and social housing and the entitlements of the Takaful and Karama programs.
With regard to the public investment section, the minister mentioned that the budget for the next fiscal year aims to ensure that public investment allocations will continue to increase in a way that outweighs any other increases to ensure better infrastructure and improve the quality of services provided to citizens with a growth rate of 27.6%. He also reviewed the most important financial allocations for items supporting growth and economic activity. As it is estimated that the growth rate of the item of support and development of exports will reach 110%, the item of wages and workers compensation to 11.4%, and the allocations of raw materials (medicine, food and other materials) will increase by 26%.

With regard to supporting the industrial and export sectors, according to the draft budget for the next fiscal year, the Ministry of Finance will bear 6 billion pounds during the next fiscal year, in the form of installments that will be paid to banks in exchange for the obligations of the monetary payment initiative for the arrears of exporters, and it is expected that the volume of cash payment to exporters will reach 21-23 One billion pounds through this initiative during the current fiscal year, and the budget also includes the approval of additional allocations to finance support programs and reimbursement of burdens for exporters to allow the payment of dues to exporters to the Export Development Fund, including the financing required for the first year of the proposed new initiative to support the export of cars by stimulating factories operating in Egypt, and the budget will continue to bear the financial burdens of reducing the prices of electricity and natural gas for the industry instead of the Ministries of Electricity and Renewable Energy, and Petroleum and Mineral Resources, at a cost ranging between 9-10 billion pounds (according to actual consumption), and the budget estimates include allocations of 2.1 billion pounds to finance The first part and year of the national project to replace vehicles (50-70 thousand taxis, microbuses and owners) to work with fresh gas Sell ​​me.

The minister said that the social protection efforts in the budget of the fiscal year 2021/2022 aim to increase the wages section allocations and reward workers by about 37 billion pounds, with the aim of directing the bulk of this increase to improve the wages of middle-grades employees as well as the entry of workers in the health and education sectors. Incentives and allowances for workers to move to the Administrative Capital, at an estimated cost of 1.5 billion pounds.

It also includes increasing pensions to ensure that there is also a real increase in the incomes of more than 10 million pensioners. The budget estimates have been prepared to include sufficient allocations to pay the annual premium due in favor of the Insurance and Pensions Fund in the amount of LE 180 billion during 2021/2022. The budget for the next fiscal year includes financial allocations to support food commodities amounting to 87.8 billion pounds, compared to about 83 billion pounds, preliminary estimates for the bill for subsidizing goods and support for farmers for the current fiscal year. The budget estimates also reflect the existence of allocations worth 20 billion pounds to finance the Takaful and Karama program and allow the provision of Monthly cash support for more than 3.6 million families from the lowest income families, and the start of financing the national project for developing the Egyptian villages and countryside.

The minister reviewed the benefits of workers in the education sector, in the new budget, which includes an incentive for developing teachers in the pre-university education sector in public and flower education, for which an amount of 1.5 billion pounds has already been allocated to the Sunni stages (kindergartens, first, second and third primary grades) at an additional cost of one billion pounds to reach The total cost to 2.5 billion pounds.

The Minister of Finance added that the benefits also include those working in higher and university education and scientific research, as it includes increasing the quality incentive for faculty members and their assistants in universities, centers, institutes and research bodies addressed by Law No. 49 of 1972, at an additional annual cost of 0.5 billion pounds.
With regard to the health sector, the Minister of Finance reviewed the benefits of workers in this sector and the most important initiatives and programs, noting that they include taking into account the impact of the application of Law No. 184 of 2019 regulating the affairs of members of the medical profession for workers in entities affiliated with the Ministry of Health and Population who are not addressed by special laws or regulations, and the cost of compensation. The medical staff and their assistants and nurses working in the various initiatives in the health sector, especially those working to combat the Coronavirus, and other initiatives under the umbrella of (100 million health) at an estimated cost of about one billion pounds, and the costs of doctors in charge of the health sector at a cost of about 0.5 billion pounds, explaining that workers in the health sector will benefit from Benefits determined for them in addition to what is decided for all employees of the state’s administrative apparatus.

The Minister of Finance added that the benefits also include focusing on improving the infrastructure of the targeted rural villages within the first phase of the Egyptian Countryside Initiative, as well as allocating 3.8 billion pounds in Chapter Four to support children’s dairy, some curative medicines for some diseases, and support for health insurance for students, under-school children, and women. The breadwinner, and what the public treasury bears to support the incapable of social security pensioners, and some groups according to the comprehensive health insurance law, in addition to allocating 7 billion pounds from Chapter Four to treat citizens at the state’s expense, and to complete the comprehensive health insurance system to cover the governorates of Luxor, Aswan, Ismailia and South Sinai .

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