Riyadh tells public sector of new pay cuts amid record deficit

Saudi king reduces salaries, perks for senior officials

Saudi king slashes salaries of ministers, employee bonuses

The Saudi Press Agency, has announced details of the resolutions; cuting the salaries of the government members all who holds the rank of minister, along with the salaries of Shura Council members.

The drop in world petroleum prices since 2014 has caused major financial problems for the Saudi government, which gets most of its income from oil and ran a budget deficit of almost $100 billion past year.

Royal decrees cut ministers' pay by 20 percent and forced them to pay their own telephone bills for personal lines.

Besides the salary cuts, the annual accommodation allowance and auto expenses were reduced by the same percentage for the Shura members, advisors of Saudi Arabia.

The measures, disclosed in a cabinet statement and royal decree broadcast on state-run Ekhbariya TV, constitute the first pay cuts for government employees, who make up about two-thirds of working Saudis. Benefits include housing, a vehicle and fuel during a their four-year term.

Overtime bonuses were curbed at between a quarter and half of basic salaries, while annual leave may now no longer exceed 30 days. "Of course, people don't like it, but it's a sign of the times", Saudi analyst and editor of Al Arab News Jamal Khashoggi said. It also freezes all new hires for government-funded jobs until the end of the current fiscal year.

Their salaries and allowances accounted for nearly half of government spending in 2015, or about $120bn (£93bn), and contributed to a budget deficit of $98bn.

To cover the difference between its spending and revenue, the government has had to draw from its large foreign reserves, built up during years of higher oil prices.

Civilians will be affected by Saudi government's decision to change subsidies on gas and electricity.

Vision 2030 aims to boost private sector employment, cutting the government payroll to 40 percent of the budget from 45 percent by 2020.

However, troops in combat on the Saudi southern border and those in security, military and intelligence operations outside the country are exempted from the Royal Decree.

Saudi troops now involved in the country's war in Yemen were exempted, the statement added.

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