November 29 2013
President Rohani’s chief of staff says the Rohani Administration does not support cutting the rich off the national welfare system, a complete reversal of what officials of the new government had been saying for months.
Chief of Staff Mohammad Nahavandian did not say what the Administration would do instead to bring the welfare system, which is breaking the budget, under control.
He asserted that there were two alternatives to cutting the rich off the welfare rolls. “The first is that affluent families voluntarily give up receiving the payments. And the second is that the administration creates more jobs for people,” Nahavandian said.
But more jobs won’t cut the welfare payments, which go to every citizen regardless of income. And the plea that the wealthy take themselves off the books is exactly what President Ahmadi-nejad tried for two years with little success.
The proposal embraced until now by the Rohani Administration would have stopped payments to the wealthiest 30 percent of Iranian families, taking a huge bite out of the most expensive program in the national budget. But Nahavandian said the Rohani Administration now opposes that because identifying such families would be a breach of their privacy.
The Iran Times has not previously heard anyone voice that objection.
The Ahmadi-nejad Administration originally did not want to make the monthly welfare payments to the richest 30 percent but shifted because it said it could not find any sure way to identify the richest 30 percent.
Meanwhile, the Majlis Budget and Planning Committee approved legislation October 20 to halt payments to the wealthiest 30 percent, though it wasn’t clear how that was to be done.
The committee hasn’t said whether it will push the bill to the floor of the Majlis now that Nahavandian has spoken out against it.
On November 3, the Majlis ordered that the payments for all Iranians continue at the same level at least through the end of the current Iranian calendar year on March 20.
The program currently pays 455,000 rials (about $15 based on the open market exchange rate of 30,000 rials) each month to every Iranian. But that payment was worth more than $40 when the program started in 2010, well before last year’s collapse of the rial.
The national budget is in a state of near chaos and despite four months in office the Rohani Administration has not charted a way out of the chaos.
Deputy Oil Minister Mansur Moazzami last week said the welfare payments total 3.5 trillion rials ($116 million at the free market rate) every month with the Oil Ministry providing 2.5 trillion or 70 percent of that from its oil revenues. But Moazzami said the Oil Ministry would no longer be able to provide that scale of funding after Now Ruz.
He said the budget law states that the welfare payments will be covered by boosting the prices of oil products, but no such price hikes have been approved for years.
The welfare-for-all system was adopted as a replacement for the decades-old system of subsidies on fuel, bread, utilities and other items. Under the subsidy system, most of the benefits went to the rich. That was most clearly seen in the case of gasoline where a Tehran family with two cars got far more benefit than a rural family that shared a tractor. The welfare-for-all system effectively reduced benefits for the rich and raised them for the poor.
