A decision to slash ministerial pay by a fifth reflects Saudi Arabia's resolve to nudge its citizens into tolerating a fall in living standards at a time of low oil prices.
Along with reductions unveiled on Monday that will affect all public sector workers, the cuts also flag to financial markets before a debut sovereign bond issue that the oil exporter is committed to budget discipline.
The measures appear largely to formalise savings introduced ad hoc in parts of the state apparatus since last year, but their announcement on state media, which gave an official start date of Oct 1., is not without political risk.
In a country that has no elections and where political legitimacy rests partly on distribution of oil revenue, the ability of citizens to adapt to reforms aimed at reducing oil dependence and improving self-reliance is crucial for stability.
Some Saudis appeared prepared to accept austerity following the signal that ministers would share the pain.
"Most of my colleagues are furious, but I see it as normal at such times," said Fahad, 27, a post office worker, who said his monthly take-home pay, including benefits, would fall to 4,800 riyals ($1,280) from 6,000. "The country has given us a lot in the past and it is our duty to show solidarity now."
However, with about two thirds of working Saudis employed by the state, scepticism surfaced on social media. "The beginning of the end!" tweeted a writer using the name Nashat Haider. "Not a rise in efficiency, it's a rise in poverty" wrote Alsheikhah Madawi.
The ruling Al Saud family has often hesitated to enact reforms that may stir unrest among Saudis, but with oil prices stubbornly low, it is now pushing changes to revitalise the private sector, slim the state, and get more Saudis into work.
A lack of taxes, a big public sector, subsidised fuel and abundant government spending are benefits that officials have long cautioned are unaffordable, yet are seen as a right by many citizens because of the kingdom's high oil output.
But energy prices have plummeted since mid-2014, causing steep declines in income and putting economic growth at risk.
It was unclear how far the steps will trim a budget deficit that reached a record $98 billion last year.
In any case the wage cuts for ministers and others "of ministerial rank", while unlikely to win big savings by themselves, appear specifically aimed at deflecting public anger by targetting those at the apex of society, economists said.
The foreign exchange, credit default swap and international bond markets were little moved by the news. But initial reaction on regional stock markets was negative, as traders concluded the cuts would curb consumers' disposable income. Saudi Arabia's main stock index closed down 3.8 percent.
Others on Twitter expressed their acceptance of the cuts to wages and other financial benefits that can form a large part of Saudi's overall income.
The hashtag "We are all today King Salman's sons" was trending, and the message "Listen and Obey", as the main duty of citizens towards their rulers, was widely shared.
Abdulaziz al-Askar, a legal adviser, tweeted that Saudis' ancestors swore allegiance to the Al Saud based on Islam and not on the basis of "allowances and bonuses".
Nawaf al-Otaibi, 42, who does civilian work for the Ministry of Defence, said the cuts would help to address long-term economic pressures and ease further sweeping reforms, which include the partial privatisation of oil giant Saudi Aramco. Reduced benefits would result in belt-tightening, he suggested.
"I get about 20 to 30 percent of my total income from these extras, so I'll have to cut back on spending - maybe put off some plans for the future but mostly just cut back on daily spending for the family, on the kids, things like this," he said.
From an international perspective, the measures constitute a an attempt to convey the government's seriousness about tackling the budget deficit, economists say.
Apostolos Bantis, head of emerging market corporate credit research at Commerzbank, said the payroll and benefit cuts were "trying to send a signal to investors that the government is serious about reforms and that it's ready to even touch something sensitive and political".
"The government is trying to give a signal to the local population that they need to tighten their belts and that this is starting from the top."
Monica Malik, chief economist at Abu Dhabi Commercial Bank, said she estimated that savings from the cuts would amount to less than 1.5 percent of gross domestic product (GDP).
But she added that the message was stronger than the anticipated savings. "Nothing is off bounds for potential fiscal reforms and it shows ongoing momentum to narrow the fiscal deficit. This is especially ahead of the expected international bond issuance," she said.
NCB Capital estimated allowances accounted for about a quarter of the government's total salary bill last year, which was 38 percent of its overall budget of about $260 billion. But it is not known how far the latest measures will curb government spending on allowances, which Saudis say are many and varied.
More substantial ways of plugging the budget gap include a $10 billion loan obtained from international banks in May and Saudi Arabia's debut international bond issue expected in October. Bankers expect it to be worth a minimum of $10 billion.
The central bank said on Sunday it had decided to inject around 20 billion riyals in time deposits into the banking system and introduced two new maturity periods for repurchase agreements, aiming to help boost financial stability in the local market.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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