Saudi Arabia seeks to cut wage bill but not salaries, says Al-Jadaan

Saudi Arabia will continue to target reducing the wage bill but will achieve this by hiring fewer people to replace those who retire, rather than cutting employee salaries, the finance minister, Mohammed Al-Jadaan told Bloomberg in an interview on Sunday.

The government is also saving “a significant amount” of money by not paying the annual raise that civil service employees are guaranteed, equal to roughly 3 percent of the wage bill each year, Al-Jadaan said.

He also said that after King Salman ordered the reinstatement of allowances for state employees, the majority of departments have already started paying back bonus and allowances to state employees.

““If it didn’t happen in one department then it is just a technical issue that they need to deal with in their budget, and we are looking at it actually, because I’ve heard this," Al-Jadaan said, referring to rumors that employees haven’t received their payments. 

The impact of the decision on the budget will be “very negligible” as the additional cost was made up for by extra efficiency in spending.

In an interview with Al Arabiya, Al-Jadaan said new stimulus packages will be announced before the year-end in consultation with the non-oil sector to create jobs for citizens.

“We allocated $54 bln (SAR 200 bln) as stimulus packages to the private sector until 2020, so far we have disbursed $4 billion (SAR 15 billion) for housing and $6.6 billion (SAR 25 billion) to the Industrial Development Fund,” Al-Jadaan said.

He stressed that it is normal for growth to decline before accelerating further in line with the economic reforms implemented by the government.

The Saudi finance minister added that 98 percent of the private sector claims were paid within 60 days.