Between Reliance and Lament: The People Await the 2019 General Budget

·       Part One

·       Date 30-12-2018

-        The general budget, as defined by Law No. (7) concerning the regulation of the general budget and financial affairs for 1998 and subsequent amendments in Palestine, is a planning instrument for a detailed program of government expenditures and revenues for a given fiscal year and includes the annual estimates of government revenues, grants, loans and other receipts and other expenditures paid as a translation of the government’s mode of operation and its programs and the distribution of collected expenditures and revenues.... and the government’s fiscal policy and its implementation for the coming year..

-        In Palestine, the government submitted its last draft general budget for adoption for the year 2018, and in accordance with the provisions of Palestinian Law No. 7 of 1998 as we indicated above..the government is required to prepare its budget for the coming year (2018) and deliver it by the first of November of the current year (2017) at the latest, to the competent authority for monitoring the government’s work and policies, which is the "Legislative Council", where the Council refers the submitted draft general budget to a committee and it is debated...and sometimes it is returned to the government for amendment, and ultimately and before the end of the current fiscal year ..it is adopted and published by the usual means with the start of the new fiscal year.... and as is customary and as international requirements demand, the government must issue a Citizen’s Budget Guide for 2018 (a simplified budget). It was issued by the government, ..but the government violated other procedures concerning the timing of submission of the draft general budget when it submitted it on 27-2-2018, and the entity to which it should have been submitted, as the law stipulates regarding the entity to which the draft general budget for 2018 should be presented, it submitted it to the Palestinian Presidency after consultation and discussion with some parties including some members of the Legislative Council and some entities from the private sector and the civil sector and some economic experts..as you know because the Legislative Council’s work had been suspended at that time for years..for reasons known to all...whether the existence of the brutal Israeli occupation or the continuation of the odious division and the ongoing dispute among the Palestinians themselves...and the government issued recommendations dated 27-2-2018 regarding its general budget, and the draft budget for 2018 together with those recommendations was submitted to the President who adopted it and issued it under the title of a decision by law and it was published in the Official Gazette according to procedure on 4-3-2018... As for our draft general budget for 2019, there is nothing to indicate any information about it so far, unlike some neighboring and brotherly countries, first among them Jordan, which issued the law of the general budget for 2019 after debate and adoption by the Jordanian Parliament on 4-12-2018...
No one denies that the brutal Israeli occupation of Palestinian lands is a destructive factor for every aspect of Palestinian political, economic and social life... but Palestinians must still try to reconcile among themselves in order to remove the odious Israeli occupation... Despite all the pain that grips our hearts at the continued serious bleeding in the status and condition of the Palestinians, I write here and try to provide a professional opinion and analysis as a certified financial and banking expert by the Palestinian Ministry of Justice, to the extent I can regarding the general budget for 2018..and the actual figures for 2017, as they appeared in the government’s final accounts on 31-12-2017.... I do not intend to defame the government by my writing, God forbid..the government and those who occupy its ministerial and other leadership positions that assume public responsibility are Palestinian citizens; I esteem and respect them, and part of them I have personal friendships and former colleague ties with in public service ...........
I cite some statistics concerning the Palestinian economy for 2017: the labor force in Palestine in 2017 reached 1.41 million persons, with an employment rate among them of 70.8%, and the economic growth rate for 2017 was 3.9%..

-        The number of civilian employees reached 77,020 employees, of whom in the Ministry of Education 42,060 employees, and the Ministry of Health 11,506 employees; employees of the Ministry of Education and the Ministry of Health represent 70% of the total civilian employees, and there are also military employees whose numbers reached 51,018 persons, and military employees represent 41% of the total employee aggregate..

·       Part Two

-        The net expected revenues in the government’s general budget for 2018 upon its issuance on 4-3-2018 were estimated at 13.504 billion shekels..... Public revenues consist of the government’s domestic revenues, which were estimated within the 2018 general budget at 4.533 billion shekels while these actual domestic revenues in 2017 amounted to 4.156 billion shekels. And the clearance revenues, which were estimated within the 2018 budget at 9.158 billion shekels while these revenues actually in 2017 amounted to 8.722 billion shekels. Domestic revenues consist of tax revenues arising from value added tax and income tax... customs and excises and any other taxes.. The tax revenues in the 2018 budget were estimated at 2.954 billion shekels, while the actual realized tax revenue figures in 2017 were 2.752 billion shekels... Non-tax revenues are represented by licensing fees and professional permits and administrative fees and fines and confiscations .....etc., where the total estimated non-tax domestic revenues in the 2018 budget amounted to 1.579 billion shekels.... whereas the actual figures for non-tax domestic revenues realized in 2017 amounted to 1.404 billion shekels.. As for the revenues estimated under the clearance item for 2018, they refer to the funds that Israel collects from value added taxes and customs and excise duties and other fees related to Palestinian imports from Israel and abroad via its ports — the ports of Palestine occupied in 1948 — and all Palestinian trade via Israel.. and the tax withholdings collected on Palestinian workers inside Israel and the settlements, and Israel delivers their net amount to the Palestinian National Authority monthly in sessions known as the monthly clearance sessions, pursuant to the Paris Economic Agreement — the Economic Protocol annexed to the Oslo Agreement between the Israeli and the Palestinian sides in 1993-.

-        As for the expenditure item, the amount of expenditures and net lending was estimated within the 2018 general budget at 18.089 billion shekels, while the actual public expenditure in 2017 amounted to 15.729 billion shekels without net lending.. Public expenditure usually includes: wage and salary expenditures which were estimated in the 2018 budget at 8.642 billion shekels, and wages and salary expenditures constituted 50% of total current expenditures.. As for the expenditure item under "non-wages" such as operating expenditures (use of goods and services by the government) estimated in the 2018 budget at 2.391 billion shekels and its estimated share in the 2018 budget was 14%, and the share of the Ministry of Health, the Ministry of Education and the Ministry of Social Development from expenditures was 39% of total expenditures, while the share of the Ministry of Interior and National Security was 26% of total current expenditures, noting that the Ministry of Health’s share alone was 11% of total expenditures while the Ministry of Education’s share reached 20%, and the Ministry of Social Development 8%... As for transfer expenditures (expenditures paid by the government to various segments of society through a public institution from which a third party benefits — such as payments to families of martyrs and payments to assist the poor) estimated for 2018 they amounted to 4.167 billion shekels, or 24% of total expenditures; capital expenditures were estimated for 2018 at 79 million shekels, and development expenditures estimated for 2018 amounted to 1.909 billion shekels representing 11% of total expenditure amounts, and net lending (balances of amounts due for electricity and water to Palestinian municipal bodies to Israeli companies — electricity and water — which are deducted by Israel from the clearance bill) was estimated in the 2018 budget at 900 million shekels...
As for Palestine’s actual trade balance for 2017 it decreased to a deficit of 5.281 billion shekels, where imports exceeded exports, with imports reaching 7.816 billion shekels, while exports for the same year reached 2.535 billion shekels...

-        The value of the total and current deficit within the general budget estimated for 2018 amounted to 4.584 billion shekels..(the government’s current deficit 2.676 billion shekels, and the development expenditures deficit 1.909 billion shekels..which will be financed by foreign aid; foreign support for 2018 (budget support from Arab and foreign countries and financing of development expenditures) was estimated at 2.790 billion shekels... As for domestic financing (borrowing from local banks and issuing debt securities) it was estimated in the 2018 general budget at 1.794 billion shekels.

-        The total public debt on 31-12-2017 amounted to 2.458 billion US dollars. The external debt amounted to (1.007) billion US dollars — of which 546 million dollars were financing from Arab institutions, 330 million dollars from international institutions, and 131 million dollars were loans under bilateral agreements (41% of the total public debt). As for the domestic debt (800 million dollars long-term loans and 651 million US dollars short-term loans) — 59% of the total public debt.

·        References: 

·       Report of the general budget for 2018

·     Statistics from the Palestinian Central Bureau of Statistics (PCBS) and the Palestine Monetary Authority (PMA)
 Publications of the Palestinian Economic Policy Research Institute – MAS – titled "Palestinian Trade and Financial Policies and Their Impact on the Trade Balance Deficit and the Budget Deficit" - authored by Mr. Mahmoud Al-Jaafari and Nasser Al-Arida..

·     Report of the al-fariq al-ahli on the general budget for 2018
 Law on the Regulation of the General Budget and Financial Affairs No. 7 of 1998
- Academic economic references

·       Citizen's Budget Guide for 2018

·        Various other miscellaneous sources and master's theses.. on the subject of government revenues and expenditures.