Saudi slashes ministers' pay

Saudi Arabia will cut ministers’ salaries by 20 per cent and scale back financial perks for public sector employees in one of the most drastic measures yet by the energy-rich kingdom to save money at a time of low oil prices.

The measures, disclosed in a cabinet statement and royal decree broadcast on state-run Ekhbariya TV today, constitute the first pay cuts for government employees, who make up about two-thirds of working Saudis.

“The cabinet has decided to stop and cancel some bonuses and financial benefits,” read a line of text on Ekhbariya, as a minister read to assembled ministers and royals, including King Salman, a list of cuts in various grades in the civil service.

The plunge in oil prices since mid-2014 has pushed energy-rich Gulf Arab states to rein in lavish public spending.

Saudi Arabia racked up a record budget deficit of nearly $100 billion last year, forcing it to find new savings and ways to raise money.

The announcement included cuts to ministers’ pay, while housing and car allowances for members of the appointed Shoura Council will be cut by 15 per cent.

Overtime bonuses were curbed at between 25 and 50 per cent of basic salaries, while annual leave may no longer exceed 30 days.

“It’s one more economic measure to balance spending. 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.