Sounds like the best of both political worlds to me. The liberals would love the entitlements and the conservatives would love not having to pay income tax. Something for everyone.
Actually, no normal country could exist with such a system. But Qatar ain't normal. When a country the size of Rhode Island sits on 5 trillion dollars' worth of proven oil and gas reserves, it can provide its' citizens with a few perks.
No wonder Sheik Khalid has a nice race team...