Price hikes expected to cast shadow on budget debate

AMMAN — The government is scheduled to present to the Lower House on Sunday the draft budget law for the fiscal year 2016, with the recent government-imposed increases in the price of gas cylinders and car licensing fees expected to cause a commotion under the Dome.

The past four days have seen mounting criticism by individual MPs and parliamentary blocs of the government’s recent decision to increase the price of the 12-kilogramme gas cylinder, used for cooking and heating, to JD7.50 from JD7.

The new fees for car licencing and renewal of licenses went into effect last Tuesday. 

The licensing fee for cars with engines under 1,000cc is JD30.

Licences for cars with 1,001 to 1,500cc engines now cost JD45; while the rate rises to JD60 for engines with a capacity between 1,501 and 2,000cc.

The fee rises to JD173 and JD225 for vehicles whose engines are sized 2,001-2,500cc and 2,501-3,000cc, respectively. 

Owners of vehicles with 3,001-4,000cc engines have to pay JD450 for the licence under the new system, while the fee for engines larger than 4,000cc is JD600.

In letters and memoranda to the House speaker and Prime Minister Abdullah Ensour, and in press remarks, several lawmakers and parliamentary coalitions called for cancelling the recent hikes, threatening to take escalating measures against the government if it continues to act as a “money collector”.

Informed parliamentary sources said around 75 MPs are expected to meet Sunday following the government’s presentation of the 2016 draft budget law to discuss a motion of no confidence against Ensour’s government.   

The government has recently unveiled what it described as a disciplined and growth-oriented budget bill for 2016 with spending estimated at JD8.496 billion and a deficit projected at 3.1 per cent of the gross domestic product (GDP). 

In the 2016 draft general budget law, the growth projection for next year is put at 3.7 per cent, while inflation is forecast at 3.1 per cent.

Under the law, the Kingdom’s exports are predicted to expand by 5 per cent next year compared to an 8 per cent decline expected by the end of this year, and imports are expected to grow by 2.5 per cent. 

In remarks to The Jordan Times, former finance minister Umayya Toukan said domestic revenues are expected to grow by nearly 11 per cent to JD6.775 billion in 2016, from JD6.095 billion re-estimated for 2015, while grants are projected to reach JD814 million, up from the JD731 million re-estimated for the current year. 

He said the grants included in the spending bill were committed by donors, noting that the $1.25 billion grant Qatar was supposed to extend to Jordan as part of the Gulf Cooperation Council pledge in 2011 was not included in next year’s draft budget law. 

Overall revenues, domestic and grants, are estimated to be around JD7.589 billion and a JD907 million deficit is forecast as the government plans to spend JD8.496 billion — JD1.311 billion in capital expenditure and JD7.185 billion in current expenditure.