The House of Representatives has started signing off on a basket of measures that will see bns in new spending flow to public servants, low income earners and the poor as part of a drive to shore up the social safety net ahead of the new fiscal year. The next budget will include subsidy cuts that will translate into rising power and fuel prices. Analysts expect this to temporarily drive up inflation, which had eased to 13.1% in April from 13.3% the month before. Just keep it all in context, folks: Inflation was running at north of 30% in May of last year.

House signs off on salary, pension increases worth more than EGP 60 bn: Parliament’s general assembly approved yesterday two special salary increases for civil servants and increased spending on pensions, Al Masry Al Youm reports.

Pay rises for civil servants: All state employees will be given a special raise ranging from EGP 140-160 a month, based on their pay grades. In additional to their annual raises, state employees not covered by the Civil Service Act will be awarded an exceptional hardship raise of 10% on their base salaries, with the minimum increase set at EGP 65. Parliament also decided to add EGP 40 to all civil servants’ base salaries after haggling with Finance Minsiter Amr El Garhy, according to the newspaper. El Garhy reminded everyone that every EGP 10 increase in the size of this social net, will increase costs to the state budget of nearly EGP 3.5-4 bn.

Cops and soldiers are getting pay bumps, too: The House’s Defense and National Security Committee approved a 15% rise in military and police pensions with the start of the new fiscal year, mirroring the raise for civil servants, Al Shorouk reports.

Pensions also look set to rise, with most pensioners getting a 15% bump and the minimum monthly pension climbing to EGP 750 from EGP 500. Social Solidarity Minister Ghada Wali has sent proposals for the Finance Ministry on how the pension increases should work out in practice, according to Al Shorouk. The House Manpower Committee had approved on Sunday the 15% pension hike and new monthly minimum pension.

Raises and pension increases combined will cost state coffers around EGP 60 bn, Prime Minister Sherif Ismail told reporters yesterday.

House Budget Committee signs off on raising income tax exemption threshold: The House of Representatives’ Budget Committee also gave businesses (who in Egypt remit employee income taxes as wage taxes to the state) a small break yesterday, raising the basic personal exemption from income tax to EGP 8,000 from EGP 6,500 previously, according to Finance Minister Amr El Garhy.