Mohammed bin Rashid signs Public Budget Law for 2017

In his capacity as Ruler of Dubai, Vice President, Prime Minister, His Highness Sheikh Mohammed bin Rashid Al Maktoum approved the Government of Dubai’s Budget Law No. (17) for the year 2016 for the emirate’s 2017 general budget, with AED47.3 billion expenditure, according to the new budget classification.

Issued earlier this year, the Financial Regulations for the Government of Dubai Law No. (1) for the year 2016 had a great impact on restructuring the emirate’s budget. The Financial Regulations Law identified new classification for the general budget, acknowledging general, independent and extension budgets. The new classification allows each party to exercise its functions independently and more transparently.

The 2017 budget reflects Dubai Strategic Plan 2021 targets and future commitments. It also features a significant rise in infrastructure spending by 27 percent, compared to 2016.

This is in sync with the directives of His Highness Sheikh Mohammed bin Rashid to raise the infrastructure efficiency in Dubai so that the emirate becomes the first destination for work and tourism across all sectors.

The budget also reflects the government’s concern for social services, including healthcare, education, culture and housing, which contributed to the high rating of the UAE in global competitiveness indices, and the top ranking in the happiness index regionally.

"The Financial Regulations for the Government of Dubai Law developed the general budget classification of the government entities. Some entities were put in a new order under the independent or annexed budgets, which led to the reduction of budget revenues and expenditure," said Abdulrahman Saleh Al Saleh, Director General, Department of Finance for the Government of Dubai.

Al Saleh, however, stressed that year 2017’s budget expenditure recorded a three percent increase compared to the expenditure approved for 2016’s budget, which reflects the expansion of the Government of Dubai and its determination to support the local economy.

"The 2017 budget was adopted with a deficit of AED2.5 billion, representing 0.6 percent of the GDP of the emirate. The deficit resulted from reclassification of the budget and 27 percent increase in infrastructure expenditure," Al Saleh added.

"Law No. (22) of 2015 regulating partnership between the public sector and the private sector forms an ideal platform to build modern practices in the management of financial resources efficiently and effectively. Over the coming years, this law will contribute to the implementation of some public projects in partnership with the private sector, which will enhance creativity and innovation, raise the government’s performance rates, achieve government efficiency and enhance transparency," he said.

The restructuring of the budget and the new classification of entities resulted in a decrease in projected revenue figures for the fiscal year 2017, compared to 2016. However, comparing revenue items for 2017 with 2016 makes it obvious that the government expects an increase in fees revenues by six percent. This is due to the economic growth of the emirate and the growth achieved in sectors such as tourism and retail.

The government fees represent 76 percent of the government’s revenues while tax and customs revenues make up for 16 percent. Oil revenues were limited to only six percent of total government revenues. Another two percent of total government revenues will come from government investment returns as a vital contribution to supporting economic growth.

Confirming the government’s keenness to support the local economy, the government expenditure for 2017’s budget has seen an increase of three percent, compared to 2016.

As part of the continued governmental efforts to raise the levels of happiness and offer a decent life to the emirate’s citizens and residents, the budget of 2017 has allocated resources for 3,500 new job opportunities.

The allocation of salaries and wages represents 33 percent of the total expenditure while general, administrative, grants and support expenditure represent 47 percent of the total expenditure.

Despite the new classification, all types of expenditure have seen an increase of six percent, compared to 2016’s budget, which confirms the government’s keenness to support the community through the expansion of health, education and housing expenditure, and also through raising the level of sports, artistic and cultural activities that will support innovation and creativity policies.

Through the expansion of infrastructure projects, Dubai government continues to support infrastructure projects as well as the future projects related to Expo 2020 Dubai.

Infrastructure allocation has increased by 27 percent from what had been allocated for the fiscal year 2016, to reach 17 percent of the total government expenditure, thus reflecting the emirate’s concern for gradual implementation of the Expo 2020 projects in order to achieve Dubai Plan 2021 targets.

However, Dubai has managed to achieve financial sustainability by achieving an operating surplus of AED2.9 billion. This illustrates the breadth of the financial solvency of Dubai. It also highlights its ability to finance all operational expenditure and achieve a surplus without requiring oil revenues.

The 2017 budget showed the extent of the government’s concern for the human being as the real wealth of the nation, in accordance with the directives of His Highness Sheikh Mohammed bin Rashid. Expenditure on the Social Development Sector, including health, education, housing and community development, represents 34 percent of the total expenditure of the budget.

The government’s concern for Security, Justice and Safety has been affirmed by the allocation of 21 percent of the total expenditure to support this sector, develop it and enable it to play its vital role professionally and proactively.

The Government of Dubai has also given its support to Excellence, Innovation and Creativity Sector through the allocation of eight percent of total government expenditure to ensure performance development and assert the culture of excellence, innovation and creativity.