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Monday, 20 March 2023

Wage, pension hikes given initial House approval amid criticism

House gives initial approval to wage, pension hikes + call on gov’t to do more: Some lawmakers called on the government to do more to curb soaring inflation yesterday as the House gave preliminary approval to the latest round of wage and pension hikes.

ICYMI- The package of measures voted on yesterday will raise salaries and the minimum wage for public-sector workers and hike pension payouts by 15% from 1 April. The government also plans to increase the personal tax exemption threshold and increase funding for the Takaful and Karama social protection program. The bill will be put up for a final vote in an upcoming session.

But some don’t think that’s enough: A number of pro-government and opposition MPs say the measures will not be enough to protect households from the soaring cost of living. “The new wage and pension hikes will help citizens bear the high cost of living for only one week because inflation rates are going higher all the time,” said Rep. Mostafa Bakry, a member of the pro-government Mostaqbal Watan party. “The government might be good at building bridges, but it is a complete failure on economic policies.”

Inflation is red hot right now: Food-price inflation reached all-time highs last month, driving headline inflation to its highest level since July 2017 and core inflation to a record level.

Pro-govt MPs call for price controls: Rep. Sabboura El Sayed and Rep. Mohamed Zeineddin, both of Mostaqbal Watan, urged the government to introduce price controls. “Without these urgent measures, the new wage and pension hikes will be of short-term impact like tranquilizers,” said Zeineddin.

MPs demanded that Prime Minister Moustafa Madbouly visit the House and explain his government’s policies. “Instead of holding a press conference every now and then, the prime minister can cross the street and come to the House to explain his government's plans on controlling soaring inflation and clamping down on monopolies,” said Rep. Ayman Abul Ela, a member of the liberal Reform and Development Party.

Global economic crisis to blame, says minister: Parliamentary Affairs Minister Alaaeddin Fouad defended the government’s record, saying that the government is doing its best to curb inflation, pointing to the role of external factors including the war in Ukraine.

ALSO APPROVED BY THE MPS- The bill to grant temporary licenses to informal industrial projects was given preliminary approval yesterday. The two-article bill would grant the Industrial Development Authority (IDA) the power to allow unlicensed projects to operate for a temporary one-year period while they work to legalize their positions. The temporary license could be extended by up to two additional years by the Trade Ministry, upon approval from the relevant authorities.

Pending approval: The House received a government-draft law on the proposed return of daylight saving. The draft law received the greenlight from the cabinet earlier this month. If passed the law would see Cairo Local Time (CLT) pushed forward by one hour from the last Friday of April through the last Thursday of October.

The House also received two loan agreements: A USD 301 mn facility from Japan to help finance Metro Line 4 and two USAID grants: one for economic governance and another for higher education.

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