Okaz/Saudi Gazette There are some readers who are not able to distinguish between the state's actual and estimated budget. It should be understood that the budget published in the media a few days ago, is an estimate of government's income and spending for the upcoming 2012/2013 fiscal year. It should be borne in mind that it is uncommon for balanced budgets to be achieved. For 40 years there has not been a balanced budget, which means there has always been a surplus or a deficit. This always happens because revenue estimates largely depend on the fluctuating price of oil. The Kingdom has had successive surpluses since 2003, with the exception of 2009, when the budget registered a deficit of SR8.6 billion. There were few surprises in this year's budget, with spending increasing by SR110 billion. But this year's expenditures are lower than the previous year's real expenditures by SR105 billion. The actual expenditures for the fiscal year 2011 reached SR804 billion, an approximate increase of SR224 billion, or 37 percent more than what was estimated. This situation has continued for the past 10 years because of the surge in oil prices. This is why government has surpassed its estimated spending. The expenditures for 2012 are therefore expected to exceed those of 2011. In other words, the figure may be more than SR800 billion and not SR690 billion estimated in the budget. It should be noted that an amount of SR250 billon has been allocated for financing the construction of 500,000 residential units. However, this entire amount will not be spent during 2012. It is likely that SR50 billion a year will be spent over the next five years for housing. The actual revenues for the year 2011 have surpassed the estimates twofold. This reflects the conservative manner in which the Ministry of Finance has been estimating oil prices, as a precautionary measure, because of the fluctuations in the oil market. This shows the wisdom of the Ministry of Finance. It has seized the opportunity to build up cash reserves for times of need. The budget statement showed that the real revenues at the end of this fiscal year would reach SR1.110 billion, with 93 percent from oil revenues, or SR1.032 billion ($275.2 billion), or twice more than what was expected. This also shows that the revenues of government from other sources did not exceed SR87 billion. This shows that the policy of diversification from non-oil revenues has not achieved the success expected over the last 40 years. In fact, the budget did not outline all sources of income, particularly from customs, the Saudi Basic Industries Corporation (SABIC) and companies and banks fully-owned by the state. Some sources say government dues and fees exceed SR1 billion yearly. __
