After off camera deliberations, parliament failed to agree 2021 budget. Amended budget reduced to 76 bn – discussions to resume next session
By Sami Zaptia.
London, 29 May 2021:
Contrary to the official statement by the Official Spokesperson for parliament (House of Representatives – HoR), Abdalla Belheeg, parliament did not partially approve the Amended 2021 budget during Monday’s session.
News has trickled out from various parliamentarians that no agreement was reached at last Tuesday’s session off air.
Discussions with Ministers on budget
Tuesday’s session was not broadcast in the morning, as had been promised. Instead, about 15 members held an off-air questioning session with the Ministers of Planning and Finance which lasted approximately four hours.
During discussions with the Ministers on the salaries section (Chapter One) of the budget, members demanded that the salaries of all employees are included for all civil, military and security public sector institutions in the east, west and south, and that back salaries are covered.
They asked whether the total value of this chapter (about LD 34.6 billion) covers the salary increase approved by parliament, including the education sector. They also demanded that the government give details of expenses in Chapter One besides salaries.
The Minister of Finance and Minister of Planning confirmed that the total of this chapter covers all the salaries of workers in the state, as well as the value of back salaries, security, taxes, end-of-service fees, housing and subsistence allowance, the value of the school ration allowance, and others.
An across-the-board salary increase would burden state finances
However, they explained that Libya is suffering from a bloated state sector and that these salary increases would impose large expenses and burdens on the state.
They stressed that the government would need additional allocations estimated at LD 16 billion if the door is opened to cover all sectors that demand an increase in their salaries.
The issue of unifying state salaries was discussed and it was agreed in principle that the government would submit a draft law to unify salaries as soon as possible, taking into account fairness and equality between sectors according to the job grades of all the state’s legislative, executive and judicial institutions.
Setting up a General Command separate from the Defence Ministry
One of the points of contention that was discussed was the possibility of setting up a dedicated Army General Command separate from the Ministry of Defence.
The ‘‘Army General Command’’ is the military organization headed by Khalifa Hafter. Hafter is recognized by the head of parliament, Ageela Saleh and a rump of eastern-based parliamentarians, but he is not recognized by the new Government of National Unity (GNU) based in Tripoli or the Presidency Council.
The Ministers diplomatically wriggled out of this impasse by pointing out that such a decision falls to the Prime Minister as he holds the position of Defence Minister and the Presidency Council as the Supreme Commander of the Libyan Army.
Discussions on rest of budget postponed until the next session
At the end of discussion on the salaries chapter it was agreed to keep the allocations of this section without reduction, and it was agreed to set another date to complete the discussion of the rest of the budget’s chapters.
Evening session of parliament – amended budget proposed with 20 percent cut
In the evening, a session of parliament was held chaired by the First and Second Deputy Heads, and an amended draft budget was submitted by a large number of members as follows:
|Chapter one – Salaries:||33,801,483,600 LD|
|Chapter two – Operational costs:||9,297,607,400 LD|
|Chapter three – Development projects:||12,000,000,000 LD|
|Chapter four – Subsidies:||20,6778,591,000 LD|
|Chapter Five – the Emergency budget:||– was cancelled|
|Total of amended budget:||LD 75,778,591,000|
The amended budget proposed by parliament means a reduction of about 20% of what was submitted by the government.
There was an attempt to vote on it, however, protest and objection by some members prevented this, and therefore the discussion was restarted in a live session.
The most important points of contention can be summarized as follows:
1- A number of members demanded that the draft budget be returned to the government and amended according to their observations, the most important of which is detailing the development and projects section and distributing these projects spatially to ensure a fair distribution between regions.
2- Include an allowance in the name of the (Hafter’s) General Command of the Army, similar to other state institutions. Some critics say that the real delay of the budget is based purely on an attempt to carve out a separate budget for the Khalifa Hafter led army in the east.
3- There was an emphasis on coordination and consultation with the government in the event that the total budget is reduced.
4- Demand by some to implement the regulations and the provisions of the Constitutional Amendments that require obtaining a prescribed majority, of 120 members, to pass the General Budget Law.
5 – Demand by some to appoint the Sovereign Positions and unify them, the most important of which are (the Administrative Control Authority, the Audit Bureau, the Central Bank of Libya) before approving the budget. This point represents the bloc in parliament that vehemently oppose the current Governor of the CBL.
In the end, the session was suspended until next week without reaching any legal decision on the 2021 budget.
Salaries will be paid out even if budget not approved
Nevertheless, the government will continue spending on a very reduced rate according to the legal principle of disbursement at a rate of 1/12 of the actual allocations for the previous fiscal year, and the salaries section are usually given priority in disbursement – whether a budget is passed or not.