KUWAIT: Head of the National Assembly budgets committee MP Adnan Abdulsamad said yesterday that the government borrowing program must be linked to key budget reforms and raising non-government revenues. Abdulsamad’s statement came a day after an expanded meeting with the government which pushed MPs to approve a debt law to allow the government to borrow up to KD 25 billion over the next three decades.
He said the meeting was attended by first Deputy Premier and Defense Minister Sheikh Nasser Sabah Al-Ahmad and Finance Minister Nayef Al-Hajraf along with the budgets committee, members of the financial and economic affairs and legal and legislative panels. Abdulsamad said the government explained to the lawmakers that the level of cash flow available to the government from the state reserve fund was fast decreasing because the fund was being used to finance the budget deficit.
The Finance Minister said after the meeting, that assets at the state reserves fund dropped to $87 billion last year after funds from the reserve were used to pay around KD14.6 billion in budget deficits over the past three years. Abdulsamad said the committees pointed out that borrowing should be linked to certain reforms in the budget in addition to guarantees to make the borrowing within the regulations and spending it in a prudent manner. The lawmaker said the meeting also underscored the importance of increasing non-oil revenues and tackling the roots of structural distortions.
In the meantime, MP Khalil Al-Saleh yesterday called in a letter on the Assembly Financial and Economic Affairs Committee to study the basis of the government’s financial and economic sustainability program. In his letter, the lawmaker demanded that the panel should study why the proposed corporate and business tax was removed from the program while the government kept its plan to review charges and prices of public services and commodities. Saleh said the program raises fears over the government’s ability to stop squandering of public funds, diversifying sources of income and tackling distortions in the budget.
By B Izzak