FNC members slam budgeting methods after confronting shortfalls

A heated debate revealed Dh1.7 billion was to be added into the budget just a week before the end of the budgeting year.
Obaid al Tayer, the UAE Minister of State for Finance Affairs, speaks during the Federal National Council session at the FNC chambers in Abu Dhabi. Silvia Razgova / The National
Obaid al Tayer, the UAE Minister of State for Finance Affairs, speaks during the Federal National Council session at the FNC chambers in Abu Dhabi. Silvia Razgova / The National

ABU DHABI // Federal National Council members criticised the Government’s budgeting methods after finding bills run up by 19 bodies that were not covered in the 2014 budget.

According to the Constitution, all federal spending must be passed through a law. However, the council has just reviewed an additional sum of more than Dh1.7 billion to be added to the budget a week before the end of the budget year.

As the council reviewed the law, members quarrelled with the finance committee, which compiled a report that saw no problem with additional funding, and with the Minister of State for Finance Affairs, Obaid Al Tayer.

While committee members said this had nothing to do with the effectiveness of the zero-based-budget and it was not a deficit, other members disagreed.

Ahmed Al Shamsi (Ajman) led the heated, hour-long debate by reminding the Minister that the zero-based-budget was paraded in the council in 2012 and members were assured it would be the end of budgeting woes.

“We were told this would not happen,” he said. “The ministry explained how there would be no deficits. We were reassured by the ministry. This shows there are shortfalls.”

Mr Al Shamsi said he could not understand how some of the additional expenses were “sudden”.

“For example,” he said, raising his voice, “the Etihad Rail Network needing an additional Dh750 million. Is it logical that they did not have a strategic plan to know they would need this? They don’t know when they will be done with their rail network?”

He said he also did not understand how the Ministry of Foreign Affairs “suddenly” needed Dh235  million to open six embassies in New Zealand, Serbia, Colombia, Norway, Angola, Guinea, and a consulate in Australia.

“I think the Ministry of Foreign Affairs has a strategic plan and knows it needs to open this many embassies the following year,” he said. “These are sums that have already been spent. How have they been spent? Did they just go to the ministry [of Finance]? What if the FNC refused to discuss this? If they didn’t get this money from the ministry, where then? Loans from the banks? We want a clarification.”

Mr Al Tayer justified the additional funds and said they came under unforeseen circumstances. He noted the increase was only 3.2 per cent of the year’s budget.

Other entities that needed further financing included the Ministry of Interior, which needed Dh247m to pay the rent on the UAE Embassy in London; the Ministry of Finance, which needed Dh203m to pay utility bills for the Health, Interior and Education ministries, and financing for the Ministry of Health’s “urgent programmes”.

Mr Al Tayer also mentioned that an additional budget was needed to build an independent office for the department overseen by Dr Sultan Al Jaber, Minister of State. According to FNC documents, more than Dh25m was budgeted. Over Dh128m was also used for state universities.

“It is a very small percentage,” he said. “As a number it is high, but it is 3.2 per cent.” Mr Al Shamsi was unconvinced.

“It is a matter of principle,” he said. “The ministry carried out a zero-based-budget, which is not the case. There was money spent outside the law, and now there is a law to justify this. And the [finance] committee ignored this.”

Ahmed Al Amash (RAK), a member of the finance committee, said the committee did not ignore this in its council report. He said Mr Al Shamsi should read the report first.

“We see no violation in this,” he said.

Abdulaziz Al Zaabi (RAK), another member of the committee, welcomed the funding requests and said it was necessary, particularly during the current economic conditions in the country.

Mr Al Shamsi took offence at Mr Al Amash’s response and insisted he had read the report. He also criticised the way Mr Al Amash addressed him.

After Mr Al Amash apologised, Mr Al Tayer said the budget was a zero-based-budget.

“What the minister is saying is contradictory to the zero-based budget,” Dr Abdulrahim Al Shahin (RAK) said. “If we cannot use the zero-based budget, then stop using it.

“The law is clear. All spending has to be done through a law. No minister can spend a single dirham without a law. The minister is now coming to cover a violation he has committed with this law today. He already spent the money and is coming now to say here are additions. It is a breach of the constitution and a violation of the zero-based budget.”

Ahmed Al Zaabi (Sharjah) said regardless of the budgeting method, the law was clear on spending.

As the debate intensified, Dr Anwar Gargash, the Minister of State for Foreign Affairs, stepped in to explain that the additional funds were necessary due to a combination of planning and political shortfalls.

He said when a country opens an embassy in Abu Dhabi, that nation asks the UAE to reciprocate. The UAE was then pressured to open embassies quickly, as some countries were “sensitive” about the matter, he said.

The discussion concluded with the council passing the law on the additional budget.


Published: December 23, 2014 04:00 AM


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