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MPs approve DNA testing for Citizens, Expats – Assembly passes KD 7 billion deficit budget

Kuwaiti parliament speaker Marzouq Al- Ghanim (center) holds hands with men who lost family members in the suicide attack at the Shiite Al- Imam Al-Sadiq mosque last week, as he poses for a photo at Kuwait’s National Assembly

Kuwaiti parliament speaker Marzouq Al- Ghanim (center) holds hands with men who lost family members in the suicide attack at the Shiite Al- Imam Al-Sadiq mosque last week, as he poses for a photo at Kuwait’s National Assembly

KUWAIT: The National Assembly yesterday passed the 2015/2016 fiscal year budget which projects a KD7 billion deficit despite a sharp reduction in spending due to the slump in oil prices. Revenues are projected at KD12.2 billion, a massive 39.16 percent lower than last year’s projections while expenditures are estimated at KD19.17 billion, 17.4 percent from last year’s projections.

Oil income is projected at KD10.76 billion, a sizeable 42.8 percent drop from last year. Oil income is calculated on the basis of a price of oil of $45 a barrel and a daily production of 2.7 million barrels per day. Finance Minister Anas Al-Saleh warned that budget deficits will persists as long as oil prices remain low and “we fail to control the ever-increasing public spending”. The minister called for measures to check current spending and to diversify the economy in order to reduce the country’s total reliance on oil.

Head of the Assembly Budgets Committee MP Adnan Abdulsamad said that the cut in spending will not affect wages, public services and development projects. Non-oil revenues are projected at KD1.45 billion, 15 percent higher than last year. Wages account for KD 5.39 billion, construction projects KD2.1 billion and miscellaneous expenditures account for KD8.8 billion. After deducting 25 percent of revenues in favor of the Reserve Fund For Future Generations in the past two fiscal years, only 10 percent is deducted this year as a result of the drop in revenues. Public subsidies are projected to account for KD3.7 billion, a third lower than last year’s allocations.

During the debate, MPs warned that the country is facing a big challenge and the government is required to behave in a rationale way.

MP Omar said that the big challenge facing the country is due to the sharp drop in oil prices, adding that the government has reduced spending in a random way. Kuwait posted a healthy budget surplus in each of the past 16 fiscal years including the 2014/2015 fiscal year which ended on March 31. The Finance Minister said that based on the almost final figures, actual revenues last year were KD 24.93 billion compared to KD31.8 billion the previous year.

Oil income was KD22.5 billion compared to KD29.3 billion the previous year - a 23 percent slump, the minister said. Spending came at KD21.0 billion leaving a surplus of KD3.93 billion. But if the budget deficit is calculated after the deduction in favor of the future generation fund of KD6.23 billion, then the budget will end in a deficit of KD2.3 billion - the first deficit after 15 years of surplus, the minister said. KD120 million of the new budget is emergency funding for the Interior Ministry to help it cope with the current situation of fighting terrorism.

The National Assembly also passed a law making DNA testing mandatory for all citizens and expatriates with the aim to create a comprehensive database that will be used to hunt criminals and terrorists. People who refuse to make the test face a jail term of one year and a fine of up to KD10,000.

Those who supply fake samples or commit a forgery face a seven year jail term. The law becomes effective after publication in the official gazette.

The National Assembly also studied the state fiscal status in a secret session in which the Finance Minister is supposed to show the Kuwaiti assets abroad. The Assembly also closed for the summer recess and will reopen in late October

By B Izzak

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This article was published on 01/07/2015