Finance Minister: Palestine’s budget surplus reached $72 M in first half of 2022

RAMALLAH, Finance Minister Shukri Bishara today said that Palestine’s budget surplus reached USD $72 in the first half of 2022.

Speaking in a press conference with journalists in Ramallah, Bishara said that the Palestinian Authority achieved a public budget surplus of some $72 in the first half of 2022 arising from a notable increase of local and tax clearance revenues and reduction of some expenditure items in line with a strategic reform plan aimed at improving revenues and reducing expenditure.

The plan envisages reducing the payroll bill from 100 percent to 70 percent of the revenues by the end of 2022 and down to 50 percent of the revenues during the upcoming years.

The payroll bill, Bishara explained, will be reduced through several measures, namely optional early retirement, halting the disbursement of undeserved allowances in addition to the rationalization of government hiring and promotions.

The reduction of the payroll bill, Bishara added, involves two stages,. The first stage involves slashing the bill to 70 percent of net government revenues by the end of 2022 through the Optional Retirement Program. The second stage involves slashing the bill to some 50 percent of the net government revenues starting from the first quarter of 2023 through forcing public employees who are made redundant into retirement across the West Bank and Gaza.

He described the payroll and stipend bill, which amounts to some ILS 950 million on a monthly basis, as a grave threat to the sustainability of the government financial system since it increased steadily over the past decade and now surpasses 100 percent of the government revenues, which amounts to ILS 982 million on a monthly basis (after the amounts Israel unilaterally deducts from the Palestinian tax revenues).

The reform plan also envisages restructuring the health sector as the cost of medical referrals account for 30 percent of the budgeted operating expenses and reached ILS 974 million in 2021.

It also includes restructuring the net lending, the amount Israel deducts from the Palestinian tax revenues to cover utilities such as water, electricity and sanitation, and medical transfers. Net lending amounted some $4.126 million in 2021.

Bishara noted that the irrecoverable amounts Israel deducts from the Palestinian tax revenues on a monthly basis due to net lending account for 20 percent while stressing that these reforms should not and could not be a substitute for rearranging the financial and economic relation with Israel, which is responsible for the financial crises and deficit gripping the Palestinian government.

Source: Palestine News & Info Agency