Public authorities in Oman face cut in perks to reduce deficit

Business Saturday 30/April/2016 21:39 PM
By: Times News Service
Public authorities in Oman face cut in perks to reduce deficit

Muscat: Public authorities and institutions in Oman will face a number of cuts in their benefits, according to a decision made by the Ministry of Finance.
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A financial circular (11/2016) signed by Darwish bin Ismail bin Ali Al Balushi, Minister Responsible for Financial Affairs, stated that the decision has been made to cushion the economy, which is struggling due to the low oil prices.
Read here: Petrol and diesel to cost more in May
Speaking to the Times of Oman, Khalid Al Busaidi, public relations officer at the Ministry of Finance, confirmed the decision.
“Yes the circular was issued on April 19,” Al Busaidi said.
This decision comes close on the heels of a similar decision implemented for employees in the semi-government companies.
Giving the details, Khalid Al Busaidi said that the authorities and institutions that fall under the decision include Information Technology Authority, Authority for Electricity Regulation, Telecommunications Regulatory Authority, and Public Authority for Consumer Protection, in addition to The Public Authority for Investment Promotion & Export Development ITHRAA, Special Economic Zone Authority – Duqm, Public Authority For Radio and Television, and Public Authority for Craft Industries.
The other affected institutions are Public Authority for Social Insurance (PASI), Public Authority for Civil Aviation (PACA), Public Authority of Mining, and Capital Market Authority (CMA), in addition to Oman International Exhibition Center, Oman Establishment for Press publication and Advertising, Security and Safety Service L.L.C, Port Service Corporation, Civil Service Employees Pension Fund and others.
“However, this decision does not affect ministries as such privileges do not exist in the ministries,” Al Busaidi noted.
Among the privileges that the employees of government authorities and institutions stand to lose are health insurance, life insurance, travel insurance and car insurance, along with life insurance allowance, loans, bonuses, and incentives during Ramadan or Eid. Increments not related to employee’s Key Performance Indicators (KPI) will also be axed.
Read also: Thousands in Oman to get their work benefits cut
The employee benefits that will be withdrawn also include allowances for school fees, mobile phones and bills, annual medical check-up for employees and their families, and annual leave tickets, apart from housemaid allowances, house rents, furniture allowances, and hospitalisation fee etc.
The circular explains that the decision comes as part of the measures being taken by the government to regulate government investment, keep tabs on government expenditure, and regulate public expenditure.
The circular also states that such privileges consume a lot of time in preparing and follow-up, and also cost the government a lot of money without bearing a direct relation to the employees’ performance, which causes expenditure to rise without a logical reason.
Therefore, the circular states that all privileges granted by the government authorities and institutions to their employees, except for the salary, shall be withdrawn under this decision.
Also, all government authorities and institutions shall adjust their current regulations in terms of the financial issues and refer to the Ministry of Finance with the new regulations before July-end this year.
The financial circular was addressed to Deputy Prime Minister for the Council of Ministers, Minister of the Diwan of Royal Court, Minister of the Royal Office, Secretary General of the Council of Ministers and State Audit Institution.
Reacting to the news, Tawfiq Al Lawati, a Majlis Al Shura member, who is also part of the finance committee, welcomed the move, saying that such steps are always welcome since their purpose is to contribute to the country’s budget.
“Any decision that helps in cutting the country’s expenditure and reducing the deficit of the country’s budget is always appreciated by citizens,” Al Lawati said.
This is a step to control government expenses under the current financial situation, he said, while adding that this is a decision taken by the Ministry of Finance.
Majlis Al Shura has formed a special economy committee to find solutions and ways to overcome the oil price deficit, he noted.
Similarly, Ahmed Al Hooti, a member of Oman Chamber of Commerce and Industry, welcomed the move taken by the Ministry of Finance saying there was no other way to overcome the current financial situation except by cutting all unnecessary expenditures.
“Such moves will provide financial support to the country’s budget and it is the time for everyone to show their readiness to lose some privileges in order to support the country,” Al Hooti said.
He noted that those benefiting from the privileges can still live without them and help the government avoid spending more cash on unnecessary things. “The government should only be responsible for employees’ salaries for now,” Al Hooti said.
“I also call on the private sector companies to start contributing to the country to overcome this situation,” Al Hooti said, and added that everyone living on this land should contribute towards overcoming the current financial situation.