The government reveals the extent of the financial crisis: 68% of revenues are withheld and resources do not cover 20% of needs

Ramallah - Ofoq News - The Director of the Government Communications Center, Dr. Muhammad Abu Al-Rub, revealed new details regarding the stifling financial crisis facing the Palestinian government, stressing that the available financial resources cover only less than 20% of its monthly needs, in light of Israel’s continued detention of about 68% of Palestinian revenues, and the decline in external support, which places the government before unprecedented challenges in fulfilling its obligations towards employees and vital sectors.

Abu Al-Rub explained that the government is working in extremely complex exceptional circumstances, during which it is trying to balance disbursing employee salaries, ensuring the continuation of health and educational services, and providing the minimum social protection, at a time when the gap between available resources and accumulated financial obligations is widening.

Abu Al-Rub’s statements came during an interview on the “Tala Sabah” program, presented by journalist Adel Gharib, and broadcast on Radio 4, Ma’an Satellite, and Ma’an Radio Network. He addressed the reality of the financial crisis, the possibility of restoring fuel subsidies, justice in the distribution of salaries, and measures to rationalize government spending, in addition to the files of education, health, government appointments, and endowments.

An unprecedented financial crisis and lack of Arab support

Abu Al-Rub stressed that the current financial crisis cannot be separated from the political and economic conditions that the Palestinian people are experiencing, pointing out that the government is facing a sharp decline in its resources, in conjunction with the Israeli occupation continuing to withhold clearance funds, which constitute the main source of public revenues.

He said that the government is entering the final months of the year without any anticipated international support packages, while it is approaching the completion of a full year without receiving direct budget support from any Arab or Islamic country. He explained that the talk is about support allocated to the public treasury, and not funding directed to projects through Arab and Islamic funds and institutions.

He indicated that the government's local revenues range between 200 and 220 million shekels per month, and may reach 260 million shekels in the best cases, which are insufficient amounts to cover a limited portion of basic obligations.

He added that the government is required to manage these limited resources to meet the needs of multiple sectors, most notably employee salaries, health, education, and social protection, stressing that the scale of the crisis exceeds the ability of traditional austerity measures to address it.

Will the government restore support for diesel and fuel?

In response to questions about the possibility of restoring government support for diesel, fuel and gas, in light of the rising prices, protests and strikes taking place in some sectors, Abu Al-Rub explained that the main dilemma lies in the limited financial resources in contrast to the expanding needs in various sectors.

He pointed out that the government is aware of the magnitude of the living burdens borne by citizens, but it faces extreme difficulty in providing the necessary funding for its existing obligations, which makes making new financial decisions that require additional allocations extremely complex.

Abu Al-Rub did not announce a government decision to restore subsidies to diesel or reduce taxes imposed on fuel. He contented himself with stressing that the government is trying to distribute its available resources according to the most urgent priorities, while realizing that the current measures do not meet the size of the actual needs of citizens.

550 million shekels per month to pay half of the salaries

Regarding the file of public employee salaries, Abu Al-Rub revealed that the government needs about 550 million shekels per month to disburse 50% of salaries, with a minimum of 2,000 shekels, while available local revenues are much less than this amount.

He explained that salaries and semi-salaries account for approximately 80% of the general budget, and that the amounts disbursed to employees directly reflect the living conditions of more than one million and 200 thousand Palestinians in the West Bank and Gaza Strip.

He pointed out that the government is trying, through the disbursement mechanisms and facilities associated with the “Yaboos” application, to mitigate the effects of the crisis on those with low salaries, explaining that employees whose salaries range between 2,000 and 2,400 shekels actually receive the equivalent of their full salaries according to the established mechanism, while those whose salaries are less than 3,500 shekels receive no less than 80% of their salaries.

He confirmed that more than 65% of employees benefit from these arrangements, which reduces the amount of deductions imposed on them.

Abu Al-Rub stressed that the government does not consider paying the deficient salaries a natural or acceptable solution in the long term, but it faces a financial reality that does not currently allow a return to full regular disbursement.

Controversy over fairness in salaries and the gap between senior employees and the rest of the workforce

The interview witnessed an extensive discussion about the fairness of the distribution of salary allocations among government employees, after journalist Adel Gharib raised the issue of the large disparity between the salaries of the higher categories and the rest of the workers, asking about the possibility of reconsidering the disbursement mechanisms to ensure the protection of those with limited income, especially teachers and workers in the health sector.

Gharib raised a question regarding estimates that about 25% of employees account for 75% of salary allocations, calling for thinking about exceptional solutions that redistribute financial burdens more fairly, instead of applying uniform deduction rates to all groups despite the large difference in income levels.

He also asked about the possibility of giving low-wage earners their full salaries, in exchange for adopting different disbursement ratios for the highest-income groups, in a way that helps stabilize the education and health sectors and restore the regularity of basic services.

In his response, Abu Al-Rub explained that the full salary bill for all sectors amounts to about one billion and 50 million shekels, and that the government needed, in previous periods, about 950 million shekels to disburse 70% of salaries, with a minimum of 3,500 shekels.

He pointed out that the highest income groups also include specialized professional competencies, especially in the health sector, explaining that the salaries of some non-specialized doctors may reach between 8 and 9 thousand shekels with additional shifts, while the salaries of some specialized doctors start from about 10 to 11 thousand shekels.

He warned that the continuation of the financial crisis may push more talents to leave government institutions and move to work in the private sector or international institutions, in search of better financial opportunities and conditions.

He stressed that maintaining competencies and expertise in national institutions represents an additional challenge for the government, especially in sectors that are already suffering from increasing pressure and a shortage of human resources.

In the context of talking about officials’ salaries, Abu Al-Rub indicated that the minister’s salary amounts to about three thousand dollars, according to his estimate, stressing that ministers are subject to the applicable salary disbursement rates, and do not receive exceptional treatment in this aspect.

Have spending rationalization measures failed to reduce the crisis?

In response to criticism regarding the failure to take sufficient measures to control public spending, Abu Al-Rub confirmed that the government is implementing a wide range of reform and austerity measures, including rationing travel and unnecessary expenses, rearranging spending priorities, and reducing employment in the public sector.

He explained that the government is adopting an emergency budget that focuses on the basic sectors, most notably health, education, social protection, and employee salaries.

But he acknowledged that rationalization measures, despite their administrative and financial importance, cannot alone address the huge gap between revenues and expenditures, in light of the continued detention of clearing funds.

He revealed that the government has drawn up an expanded list of about 50 reform steps, stressing that the impact of these measures remains limited compared to the size of the total financial commitments.

He pointed out that annual local revenues, which average about two billion shekels or slightly more, may not be sufficient to cover the needs of the health sector alone, if all expenses related to services, medicines, consumables, and medical referrals are taken into account.

He considered that talking about reform and rationalizing spending remains necessary, but it cannot constitute a substitute for restoring withheld revenues and providing stable sources of financing.

Stopping government appointments saves 120 million shekels annually

In one of the most prominent steps revealed during the interview, Abu Al-Rub announced that the government had almost completely halted new appointments in the public sector, with the exception of specific needs in the health, education, and endowments sectors.

He explained that this step saved the public treasury about 120 million shekels annually, as part of a policy aimed at controlling the salary bill and limiting the expansion in the number of employees.

He pointed out that the government does not automatically compensate for all vacancies resulting from employee retirement, but rather new appointments are limited to areas required by necessity to ensure the continuation of basic services.

He stressed that the decision came out of a conviction of the necessity of addressing job inflation in some government institutions, taking into account the needs of vital sectors whose cadres cannot be dispensed with.

69 million shekels for medicines within two months, despite the continuing shortage

In the health sector, Abu Al-Rub revealed that the government provided medicines and medical consumables to government hospitals and health facilities worth about 69 million shekels during the past two months alone.

He explained that these allocations were not sufficient to end the existing shortage of some medicines and supplies, as a result of the significant increase in demand for health services and the increasing number of citizens who depend on free health insurance.

He pointed out that tens of thousands of citizens have joined the umbrella of free health insurance, especially after large numbers of Palestinian workers lost their job opportunities inside Israel, which doubled the pressure on government health facilities.

He stressed that the government seeks to maintain the continued supply of medicines and medical consumables despite the financial crisis, considering that the health sector represents one of the priorities that cannot be undone.

The government is considering increasing school working days

Regarding the education file, Abu Al-Rub revealed that the government, in cooperation with the Ministry of Education, is searching for additional alternatives to enhance the regularity of school hours, in light of the continuation of the three-day weekly system in some schools.

He stressed that this system is not sufficient to meet educational needs, indicating that the government is aware of the magnitude of educational losses resulting from reducing working days.

He explained that any treatment of this issue must take into account the difficult financial circumstances of teachers, the costs of reaching workplaces, and the obstacles imposed by Israeli checkpoints and movement between cities and villages.

He pointed out that the government took steps during the recent period to transfer a number of teachers to schools closer to their places of residence, with the aim of reducing transportation burdens and overcoming the difficulties associated with checkpoints and closures.

He pointed out that the government provided facilities to public employees in the areas of registering their children in universities, paying water and electricity bills, and licensing vehicles, in addition to other measures aimed at alleviating financial burdens.

He stated that these facilities are linked to monthly financial burdens estimated at about 100 million shekels, stressing that the government is trying to expand the scope of support according to its limited capabilities.

The crisis of imams and preachers opens the file of the Ministry of Endowments

The interview turned to the issue of the shortage of imams and preachers working on the staff of the Ministry of Endowments, after journalist Adel Gharib raised the presence of large population centers in the Hebron Governorate suffering from a clear shortage of approved religious cadres.

Gharib pointed out that there are mosques in towns and villages, including Tarqumiya, Beni Naim and Yatta, that rely on volunteer preachers or those assigned to the reward system, in light of the failure to compensate for vacancies resulting from the retirement of former employees.

He explained that some mosques face difficulties in securing regular preachers, and that a number of those assigned have not received their rewards for long periods, which has exacerbated the problem.

In his response, Abu Al-Rub confirmed that the Ministry of Endowments faces challenges related to the shortage of cadres, but he expressed his reservations about some estimates related to the presence of large population centers that do not include any officially appointed preacher or imam.

He asked to be provided with the names of the regions and mosques that suffer from this problem, pledging to follow up the file with the Ministry of Endowments and the competent authorities, and to verify the extent of the deficiency and possible measures to address it.

He also pointed out that there are reform steps within the Ministry of Endowments, which included improving the governance of some resources and enhancing the role of the Zakat Fund, in addition to directing a portion of the Islamic Endowment’s revenues to help displaced and affected families in the northern West Bank, in coordination with the Ministry of Social Development.

He stressed that these measures come within efforts to redirect available resources towards the most urgent social needs.

The government pledges to pursue commercial fraud and exploitation of citizens

At the conclusion of the interview, journalist Adel Gharib touched on the issue of adulterated oil, in light of the fears related to the exploitation of citizens during the olive season, asking about the role of the government and regulatory agencies in combating these practices.

Abu Al-Rub stressed that the government's efforts are not limited to combating fraud in olive oil, but rather include various forms of economic infringements, smuggling and evasion, and attempts to exploit the difficult living conditions that citizens are experiencing.

He pointed out that the competent government agencies, including oversight agencies and customs police, continue to work to pursue violations and strengthen control procedures, expressing his hope that the scope of these efforts will be expanded during the coming period.