Hassan Al-Sitri
Speaker of the House of Representatives, Ahmed Al-Muslim, referred to the Financial and Economic Affairs Committee a proposal for a law regarding linking government support to the sustainable costs of living index.
The explanatory memorandum for the proposal stated that citizens are currently facing increasing living pressures as a result of the rise in prices of basic goods and services and housing costs, which has been reflected in the purchasing power of families, especially low-income families and retirees. Given that official inflation indicators do not directly reflect the value of support and pensions, it has become necessary to develop a legislative framework that ensures that support is reviewed and linked to an approved index of the cost of living, in order to achieve greater justice and social stability.
The proposal, submitted by MP Mounir Sorour, is based on a number of foundations and principles, the most prominent of which are: Improving the purchasing power of Bahraini families by linking support and pensions to the cost of living index and updating it regularly, in a way that reduces financial burdens, helps families meet their basic needs, and takes care of the first groups with support by identifying low-income families based on the average national income; To ensure that aid reaches those who need it most, and to enhance transparency and credibility by requiring the providing government to issue the index based on official data and announce it to the public clearly, in a way that consolidates citizens’ confidence in the support distribution mechanism and rapid response to economic changes.
The proposal allows the government to take exceptional measures when a significant increase in prices occurs, in a way that protects families from the effects of sudden inflation, and achieves financial balance, as the law stipulates financing its obligations from multiple sources, including the general budget, a percentage of value-added tax revenues, and contributions from major companies, in a way that maintains the sustainability of state resources and promotes social justice by linking direct support to costs. Actual living, which reflects the state’s commitment to supporting its citizens and alleviating living pressures.
The memorandum indicated that this proposal combines social and financial considerations within a balanced framework, and reflects the concern to improve the standard of living for citizens while maintaining the efficiency and sustainability of public resources.
According to the proposal, the Council of Ministers will issue a cost of living index semi-annually, based on the report submitted by the Ministry of Sustainable Development, provided that it includes the following indicators: prices of basic food commodities, housing costs, rents and housing installments, health and education costs, and the index will be announced in the Official Gazette and on the website of the Ministry of Finance and National Economy.
The Council of Ministers directs the Ministry of Sustainable Development to review its report every year and months, and presents the amendment to the Council of Ministers for approval based on the cost of living index. The report must include social and economic justifications for any amendment to the index, whether increase or decrease, and the Council of Ministers has the discretion to publish the report without disclosing the index numbers that are announced through the relevant official channels.
If the index rises by (5%) or more within a period of six months, the Council of Ministers may issue an exceptional decision to disburse temporary additional support to low-income families, with its duration and value determined according to the prevailing economic conditions.
The financial obligations arising from the implementation of the provisions of this law shall be financed from the appropriations included annually in the state’s general budget, donations made by civil society organizations and national private sector institutions operating in the Kingdom of Bahrain, and a percentage not exceeding (5%) of the proceeds of the value-added tax, the selective tax, and the multinational corporation tax. The Council of Ministers may raise this percentage to (10%) according to the general performance of the national economy and its indicators. Positivity.
