Saudi ministerial salary cuts to save $15m over four years

Cuts to the salaries of Saudi Arabia’s ministers and Shoura council members announced this week will reportedly save the government about SAR58m ($15.46m) over the next four years.

On Monday, a cabinet statement and royal decree broadcast on state-run Ekhbariya TV announced that the salaries of ministers would be cut by 20 per cent and Shoura Council members by 15 per cent with curbs on overtime and annual leave.

Read: Saudi Arabia reduces ministers’ pay, cuts public sector bonuses

The new measures will reduce ministers’ current monthly salary from SAR51,000 ($13,595) to SAR40,800 ($10,876), according to Saudi Gazette, resulting in a saving of SAR13.7m ($3.65m) over four years.

They will also save about SAR7m ($1.86m) a year in Shoura Council salaries, totalling SAR28m ($7.46m) over the council’s term of four years, according to local reports.

Further savings are expected to come from a cut in telephone allowance, which will limit ministers to SAR1000 ($266.58) a month of landland and mobile bills.

In addition SAR9m ($2.39m) is expected to come from reductions in annual housing allowance and furniture allowance paid to Shoura members.

The total reduction in benefits, including expenses for purchasing vehicles, drivers, maintenance and fuel costs will save about SAR44m ($11.7m), according to the publication.

Under the decree, overtime bonuses were also limited to between 25 and 50 per cent of basic salaries and annual leave may not exceed 30 days.

There will also be no pay rises next year, even for staff renewing or extending their contracts.

The measures come after the kingdom posted a record budget deficit of $100bn last year and is undergoing far-reaching reforms to diversify its economy.