The parliament discussed the draft budget of the next fiscal year (FY) for the second consecutive day.
Member of the Plan and Budget Committee of the parliament Hesham Abdel Wahed said that parliament will vote on the draft budget on Wednesday in a general session to approve or reject it. During the session, the government will respond to the members’ comments and inquiries.
He explained that parliament has given its members three minutes to express their opinions and comment on the budget under the limited time for discussion.
On Sunday, the 25/30 Coalition criticised violating the constitution and calculating the allocations of health, education, and scientific research based on the gross domestic product (GDP), not the gross national product (GNP).
Abdel Wahed, however, said that the Plan and Budget Committee agreed with the Ministry of Finance that the GNP is difficult to estimate. This meant it would be easier and more realistic to calculate the allocations upon the GDP of the current FY, he explained.
Sources in parliament said that the draft budget will be approved by over 350 members, especially since the Support Egypt Coalition will agree on passing it. In addition, there are attempts to convince the Free Egyptians Party and the Wafd Party to agree.
The Free Egyptians Party stipulated its approval for making amendments on the draft budget.
The party said, in a statement, that the interest rates of debt during the next FY devour 30% of the expenses of the budget, while the interest rates of local debt represent 97.4% of the size of the interest rates of both, the local and external debts. This requires decreasing the debt through replacing the debt owed to the public banks with assets of state-owned projects.
It added that subsidies amount to EGP 210.3bn in the draft budget. However, they are expected to increase because of the expectations about the increase of the US dollar price against the Egyptian pound and the oil price.
Liberal Egyptians Party is demanding a database to ensure delivering support to those in need and broaden the database of the Solidarity and Dignity Programme (Takafol wa Karama), to gradually shift to cash support, rather than in-kind support.
Haitham Al-Hariri, a member of 25/30 coalition, told Daily News Egypt that the government has to prioritize, and that health, education and scientific research must be at the forefront of expenses.
Momtaz Al-Saeed, former Minister of Finance, said that reducing the budget deficit to 9.8% of the GDP – as planned in this FY’s draft budget – will lead to controlling the public debt, and reducing it below 98% of GDP.
He added that the step that precedes the rationalization of spending is to develop the country’s resources and optimize tax collection. The next step would be to rationalize public spending on subsidising petroleum products. Subsidies reached approximately 43% of next FY’s draft budget, amounting to EGP 35bn, compared to EGP 61bn in this FY.
The total tax revenue estimate of the 2016-2017 draft budget amounts to EGP 433bn, compared to EGP 422bn this FY.