Sheikh Mohammed signs public budget law for 2017 with Dh47.3bn

In his capacity as Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates, has approved the Government of Dubai’s Budget Law No. (17) for the year 2016 for the emirate of Dubai’s 2017 general budget, with Dh47.3bn expenditures, according to the new budget classification.

Issued earlier this year, the Financial Regulations for the Government of Dubai Law No. (1) for the year 2016 has had a great impact on restructuring the emirate’s budget.

The Financial Regulations Law identified new classification for the general budget acknowledging general, independent and extension budgets. The new classification allows each party to exercise its functions independently and more transparently.

General budget for 2017 features came as follows:

- New restructure

- Increase in infrastructure spending by 27%

- An operating surplus of Dh2.9bn

-  More than 3,500 new jobs

The 2017 budget reflects Dubai Strategic Plan 2021 targets and future commitments.

The budget features a significant rise in infrastructure spending by 27% compared to 2016. This comes as a translation of the directives of His Highness the Ruler of Dubai to raise the efficiency of infrastructure in Dubai in order for the emirate to become the first destination for work and tourism across all sectors.

The budget has also shown the government’s concern for social services, including healthcare, education, culture and housing, which contributed to the high rating of the UAE in global competitiveness indices, and ranking first in the happiness index regionally.

Abdulrahman Saleh Al Saleh, Director General, Department of Finance for the Government of Dubai said: “The Financial Regulations for the Government of Dubai Law, developed the general budget classification of the government entities. Some entities were put in a new order under the independent or annexed budgets, which led to the reduction of budget revenues and expenditures”.

Al Saleh, however, stressed that the 2017’s budget expenditures recorded an increase of three percent from the expenditures approved for 2016’s budget, which reflects the expansion of the Government of Dubai and its determination to support the local economy.

“The 2017 budget was adopted with a deficit of Dh2.5bn, representing 0.6% of the GDP of the emirate,” added Al Saleh.

“The deficit resulted from the reclassification of the budget and the 27% increase in infrastructure expenditure.”

“Law no. (22) of 2015 regulating  Partnership between the public sector and the private sector, forms an ideal platform to build modern practices in the management of financial resources efficiently and effectively. Over the coming years, this law will contribute in the implementation of some public projects in partnership with the private sector, which will enhance creativity and innovation, raise the government's performance rates, achieve government efficiency, and enhance transparency.”

Projected Government Revenues for 2017

The restructuring of the budget and the new classification of entities resulted in a decrease in projected revenue figures for the fiscal year 2017 compared to 2016.

However, comparing revenue items for 2017 with 2016 make it obvious that the government expects an increase in fees revenues by six percent.

This is due to the economic growth of the emirate and the growth achieved in sectors such as tourism and retail.

The government fees represent 76% of government revenues, while tax and customs revenues represent the percentage of 16%.

Oil revenues were limited to only six percent of total government revenues. Two percent of total government revenues will be coming from government investment returns, as a vital contribution to supporting economic growth.

Projected Expenditures for 2017

Confirming the government's keenness to support the local economy, Government expenditures for 2017’s budget has seen an increase of three percent compared to 2016.

As part of the continued governmental efforts to raise the levels of happiness and offering a decent life in the emirates for citizens and residents, 2017’s Budget has allocated resources for 3,500 new job opportunities.

The allocation of salaries and wages represents 33% of total expenditures, while general, administrative, grants and support expenditures represents 47% of the total expenditures. Despite the new classification, these expenditures have seen an increase of six percent compared to 2016’s budget, which confirms the keenness on supporting the community through the expansion of health, education and housing expenditures, and raise the level of sports, artistic and cultural activities, in support to the innovation and creativity policies.

Through the expansion of infrastructure projects, the Government of Dubai continues to support infrastructure projects as well as the future projects related to Expo 2020 Dubai. Infrastructure allocation has increased by 27% from what has been allocated for the fiscal year 2016, to reach 17% of total government expenditure, reflecting the emirate's concern for the gradual implementation of the Expo 2020 projects, in order to achieve Dubai Plan 2021 targets.

On the other hand, Dubai has managed to achieve financial sustainability by achieving an operating surplus of Dh 2.9bn. This illustrates the breadth of the financial solvency of Dubai.

It also highlights its ability to finance all operational expenditures and achieve a surplus without the need for oil revenues.

The Sectorial Distribution of Government Expenditure

The 2017 budget showed the extent of the government's concern for the human being, as the real wealth of the nation, in accordance with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum.

The expenditure on Social Development Sector including health, education, housing and community development areas represents 34% of the total expenditure of the budget.

The government’s concern for the Security, Justice and safety has been affirmed by allocating 21% of the total expenditure to support this sector, develop it, and make it able to play its vital role professionally and proactively.

The Government of Dubai has also given its support to Excellence, Innovation and Creativity Sector through the allocation of eight percent of total government expenditure for performance development and asserting the culture of excellence, innovation and creativity.

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