Wednesday, February 22, 2023

Salaries cut, ‘unnecessary’ trips prohibited as PM unveils major austerity measures

PM says centre, provinces to cut power supply of malls and markets if they don't shut down by 8:30pm

PM Shehbaz Sharif (centre) addresses a press conference in Islamabad, on February 23, 2023. — PID
PM Shehbaz Sharif (centre) addresses a press conference in Islamabad, on February 23, 2023. — PID
  • PDM-led government aims to save Rs200bn through measures.
  • Power supply of malls to be cut by 8:30pm if they don't close.
  • Cabinet members to not reside in five-star hotels during visits.

Prime Minister Shehbaz Sharif Wednesday unveiled a host of austerity measures to save Rs200 billion — aimed to keep the country afloat as the nation buckles up to meet the International Monetary Fund's (IMF) conditions.

Pakistan is desperate to unlock the next tranche worth $1.1 billion loan facility with the IMF but is struggling to meet tough conditions set by the global financier.

The IMF is demanding that Pakistan boosts its pitifully low tax base, end exemptions for the export sector, and raise artificially low energy prices that are meant to help poor families.

The nation is in dire need of funds as it battles a wrenching economic crisis as the State Bank of Pakistan (SBP)-held foreign exchange reserves barely cover one month of imports.

Addressing a press conference flanked by cabinet members, the premier announced that the ministers and advisers to the premier have "voluntarily" decided not to take salaries from the government in order to save millions from the national exchequer.

The measures

  • All federal ministers, state ministers, advisers, and special assistants have decided to voluntarily not take their salaries;
  • All ministers will pay their power, telephone, water, and gas bills through their own resources;
  • All luxury cars are being taken back from cabinet members and will be auctioned;
  • When necessary, ministers will be provided one vehicle for security;
  • Government officials will travel in economy class and their assistants will not go with them on official tours;
  • During foreign tours, cabinet members will not reside in five-star hotels;
  • All ministries, divisions, departments, subdepartments, and independent organisations' current expenditures will see a cut of 15%;
  • Principal accounting officers of ministries, divisions, departments, subdepartments, and independent organisations will adjust their expenses accordingly;
  • Government officials will not be allowed to buy luxury cars till June 2024;
  • Government officials will only hold official tours if obligatory;
  • Car allowances for government officers who already have official vehicles will be discontinued;
  • Cars provided to government officers for security will be taken back;
  • Interior ministry will decide which government officer gets security vehicles;
  • Zoom conferences will be prefered instead of visiting countries;
  • No new department or division will be created, whether it be at the tehsil level or at the centre;
  • To save power and gas, offices will open at 7:30am and less power consuming appliances will be used;
  • Government officers will not be allotted more than one plot;
  • Only one dish will be eaten at government meetings, tea and biscuit will be served at other meetings;
  • Prohibition of food will not be applicable to foreign dignitaries;
  • Centre, provinces to cut power supply of malls and markets if they don't shut down by 8:30pm;
  • Townhouses will be constructed for ministers and government officers;
  • Single treasury account will be established; and 
  •  Toshakhana gifts' details will now be available online.

The prime minister said that austerity measures were a priority for the coalition government, and the ongoing situation also demands the nation as a whole cut down their expenses and move towards a simple lifestyle.

He appealed to Chief Justice of Pakistan Umar Ata Bandial, chief justices of all high courts, the lower courts, and the chief ministers of all four provinces to the federal government's measures.

The prime minister said that it was crucial for the leaders to adopt the austerity measures as the country is facing an uphill task on the economic front.

Inflation and 'mini-budget' 

Premier’s press conference comes, two days after the National Assembly unanimously approved the government’s much-needed Rs170 billion ‘mini-budget’ — a move mandatory for seeking a $1.1 billion tranche of the IMF loan.

The prime minister said that the government passed the 'mini-budget' to meet the IMF's preconditions, but noted that the inflation was rising due to the Washington-based lender's demands.

PM Shehbaz said that the talks with IMF were in the final phase and the government would soon strike a deal with the lender. "Unfortunately, as the subsidies have ended, inflation will rise."

The premier said that the centre would take the country out of the economic crisis with the help of the "elders and the nation".

In response to a question, the premier said that a person — Pakistan Tehreek-e-Insaf (PTI) Chairman Imran — would claim that politicians have kept billions of dollars abroad in Swiss accounts.

"This person would say that he will bring that money back. I wish that the person who made these claims, was questioned back when he was in power," the prime minister said.

'Biased judges'

In response to another question, he said that the government respects the superior court, but for how long would it keep its eyes closed when judges are "completely biased".

The prime minister said that Pakistan Muslim League-Nawaz (PML-N) supremo Nawaz Sharif was disqualified in a trivial matter, while the court regularised Khan's 300 canal home.

"I, not as the prime minister, but as PML-N's head, have demanded that biased judges should not hear N-League's cases," PM Shehbaz stressed.