This is a picture of a beautiful flower.[/caption]

این یک تصویر از یک گل زیبا است.

This is a picture of a beautiful flower.Khosrow Sadeghi Boroujani

Overview of the bill

Annual budget

1397

The budget, as a document that shows the direction and path of the government’s major policies, is of great importance. The numbers and figures under its sections represent the problems that the government struggles with, and besides dealing with price changes and privatizing tasks, it has no other plan or program to improve the situation. This is not just a personal opinion, but a consensus among most economists and experienced experts who, for years, have presented sincere suggestions to the government and have had the most criticisms of the 97 budget bill.

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The budget of each country is a financial plan of income and expenses during a year. However, the budget document also serves as a sign and shows the direction of the country’s overall economic policies. It indicates what changes are planned for the country’s infrastructure and how much will be spent on its development. Will the country’s income be based on its underground and natural resources or will it reduce its dependence on these resources? How much will be collected in taxes from the people and businesses, and which groups will pay more taxes? Which sectors will receive more subsidies from the government, and which subsidies will be reduced or eliminated? Will the private sector expand its activities, or will the government increase its supervision over this sector? These are just a few of the many questions that can be answered by examining the budget document and comparing the large amounts of numbers with those from previous years.

According to the government budget proposal that has been prepared and presented to the parliament for discussion for the year 1397, the amount of the future budget is 1,195 trillion tomans. The budget is divided into two parts, the general budget and the budget of companies. Of this amount, 425 trillion tomans are allocated to the general budget and the remaining 814 trillion tomans are for the budget of companies and state banks. The budget proposal for the year 97 is based on a barrel of oil price of $55 and a dollar to toman exchange rate of 3,860 tomans. Assuming a daily oil sales of 2.6 million barrels, the oil income will be 203 trillion tomans for the year.

In this bill, according to the government’s opinion, the country’s infrastructure budget has decreased by 15% and the current budget has increased by 9%. Tax revenues have also increased by 3.12% compared to the current year, while oil revenues have decreased by 3.11%.

But how will the government compensate for the decrease in infrastructure budget? One of the important decisions of the government in the 97 budget bill is the privatization of infrastructure projects and public-private partnerships. According to experts, there are between 400 to 600 trillion tomans worth of unfinished infrastructure projects, and the private sector can complete these projects using resources from funds, banks, and incentives such as tax exemptions or product guarantees. However, the term “public-private partnership” is just a formality in the budget document, and it is planned for unfinished infrastructure projects to be handed over to the private sector. But the question of who these private sector actors are in Iran, whether they are truly private or exclusive, how much they benefit from government and state monopolies, how much they increase the overall cost, and what effects they have on the Iranian economy are separate discussions that cannot be addressed in this note.

The government has also proposed in the budget bill that the Organization for Targeted Subsidies change its name to “Social Welfare Fund” and amend its articles of association in terms of subject matter, structure, and other dimensions in order to carry out its new mission under the supervision of the Ministry of Cooperatives, Labor, and Social Welfare. The assets and properties of the aforementioned organization will be transferred to the Social Welfare Fund.

Furthermore, the government was allowed to spend 37 trillion tomans from the targeted subsidies organization’s resources in 2018. Of this amount, 23 trillion tomans is allocated to cash and non-cash subsidies for households. This is while the government had been paying approximately 42 trillion tomans annually for cash subsidies in the past seven years, and the decrease of 19 trillion tomans in cash subsidies indicates the elimination of 34 million subsidy recipients, resulting in a decrease in the budget. Therefore, the reduction of 33 million people eligible for cash subsidies is among the important decisions for next year’s budget. Let us remember that at the beginning of the discussion of targeted subsidies and cash payments to the people in the Ahmadinejad government, some experts predicted the gradual elimination of subsidies, and today the “Prudence and Hope” government has precisely implemented its policy of achieving such a decision.

Expensive bread, polluted air

One of the major changes in the budget for the coming year that causes great concern for the lower classes of society is the discussion of bread subsidies. In previous years, the government included two separate rows for “cash bread subsidies” and “bread subsidies” in the budget bills, which in the 96 budget bill were respectively 2,300 billion tomans and 8,200 billion tomans. In total, the government proposed a budget of 10,500 billion tomans for bread subsidies in the 96 budget bill. This is while in the 97 budget bill, the two rows of “bread subsidies” and “cash bread subsidies” have been removed from the budget tables and in Note 14 of the budget, 3,300 billion tomans have been allocated from the resources of the Targeted Subsidies Organization for “bread subsidies and guaranteed wheat purchases”, of which according to the budget rows, 1,700 billion tomans should be spent on guaranteed wheat purchases.

On the other hand, one of the most important problems that has had a significant impact on the well-being and health of people in recent years and has threatened them is air pollution in Tehran and major cities. Children and students in schools are among those who are most affected by this social issue. It is natural that government actions in the development of public transportation and providing subsidies for it, as well as providing subsidies for milk distribution in schools, can help reduce pollution and reduce its harmful effects on children. The subsidies that the government pays for school milk and public transportation are among the budget items that can be considered as indicators of government spending on social welfare and helping the health of children and the well-being of citizens. However, the subsidies for school milk in the amount of 200 billion tomans and the subsidies for public transportation tickets, Tehran metro tickets, and suburban train tickets in the amount of 245 billion tomans are among the budget items that have not changed in the next year’s budget bill compared

“Nail varnish in use”

The problem of unemployment, especially among university graduates, is one of the issues that has paralyzed the economy of Iran. The development of programs such as internships can be considered as part of the government’s efforts to address this problem. It is expected that this program will not only solve the problem, but also provide employers with more opportunities to exploit labor and bypass labor laws by reducing wages.

In the budget proposal for the year 1397, the government has been given permission to deposit 100% of the resources obtained from the price difference of energy carriers in 1397 compared to the price of these carriers at the beginning of 1396 into a special account under the supervision of the national treasury, and to allocate the resulting resources, up to a maximum of 17,400 billion tomans, in the form of managed funds and subsidies, in combination with resources from the National Development Fund and bank facilities, towards supporting production, employment, education, and assisting young university graduates with internships. Therefore, the government has been given the power in the proposal to increase the price of energy carriers and use the excess amount obtained from this method for job creation.

According to reports presented by two deputy ministries of the Ministry of Cooperatives, Labor and Social Welfare in the government and parliament, the increase in energy carriers prices reduces economic growth by one percent. This decrease in economic growth leads to the unemployment of 240 to 360 thousand people, an 8.2% increase in the real inflation rate, an 8% increase in the abstract inflation rate, and a 7% increase in the poverty line. However, despite being aware of such reports, the government has proposed increasing the prices of energy carriers in the budget bill.

If this government action is approved by the parliament, it will be a perfect example of turning the tables. In recent years, one of the main reasons and excuses for employers and production units to lay off workers has been the increase in energy costs and production expenses. With this government action, it is natural that this excuse will be intensified and the grounds for mass layoffs of workers will be provided. In addition, the government cannot provide any guarantee that this will not happen. Apart from slogans and common phrases, it has not presented a specific, practical, and operational plan for job creation.

The potter who drinks from a broken pot.

One of the other important points of the next year’s budget is the government’s disregard for the amount of outstanding debts of the Social Security Organization. The government currently owes over 150 trillion tomans to this insurance company, while according to paragraph “z” of clause 7 of the proposed budget bill for 1397, the Social Security Organization is obligated to deposit all of its share of medical expenses from the total income obtained from deducting insurance from the insured, according to the provisions of the Social Security Law, into an account under the name of “Social Security Medical Insurance” with the National Treasury, so that the Social Security Organization is under the supervision and control of the government to spend these resources in accordance with the Social Security Law. This new innovation not only violates the Social Security Law, but also questions the independence of this public, non-governmental institution and puts its resources under the supervision and control of the government, which is the biggest debtor of this organization. It should be noted that