Minister of Finance Klemen Boštjančič (Source: STA)
At the regular session, where MPs discuss the proposal for state budgets for the next two years, SDS representatives were critical of the mismatch of income tax rates and reliefs with inflation, with which the state should collect 125 million euros more in income tax next year. With the new year, the fiscal rule will be taken into account again, which would already be challenging under normal conditions, but after the floods, it is an even bigger problem.
At today’s continuation of the regular session, MPs are discussing the draft state budgets for the next two years. The Finance Committee of the National Assembly approved the budget documents for 2024. They set the maximum amount of expenditure at 16.2 billion euros, while revenues are expected to reach 14 billion euros. Slovenia’s deficit would thus amount to 2.2 billion euros, or 3.3 percent of gross domestic product.
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The budget for next year is now different from the one adopted by the National Assembly last November. In particular, expenses are increasing, which are higher by 720 million euros, which, according to the government, is the result of providing money to eliminate the consequences of floods. Finance Minister Klemen Boštjančič he said that 1.1 billion euros have been earmarked for this purpose in the budget. The approval of the budget for 2025 was already the target of criticism, let us remind you that the Fiscal Council warned Golob’s government several times about unrealistic rebalancing, and now the government has received criticism also because it adopted measures that have significant effects on the budget even after , when the budget documents were already sent to the National Assembly. Speech of the Secretary of State Sasha Jazbec was that the floods occurred according to the adopted budget and that therefore the reconstruction costs were also included in the projections for the following year.
The economist also warned that the government is doing the opposite of what it should be, and that an expansive fiscal policy is the wrong way to go in times of such high inflation. Anze Burger, who said that the government should be doing the opposite of what it is doing if the goal was really to reduce inflation. You can read about this and what he specifically meant here.
The head of the SDS parliamentary group, Jelka Godec, expressed a significant concern regarding the budget, saying that “in the budget is also worried about the insatiable malha of the health insurance company. Funds are now being increased from 240 million to 420 million, and the coalition is bragging about how it abolished supplementary health insurance. This is not true. They changed it to mandatory”. She went on to warn that all investments, at least as far as her municipality and surroundings are concerned, are being stopped “nnot only in the area of road infrastructure, but also in other areas, in the area of education, culture and so on”, she said.
President of the Fiscal Council Davorin Kračunwho has been warning about inadequate budget planning for a long time, this time warned that “the planning in the budget documents is deficient and does not allow adequate trust” and yes “due to the adoption of additional measures and their changes during the consideration of budget documents, unreliability increases,” reports Slovenian Forbes. He believes that incomplete and insufficiently credible statements create the appearance of accounting compliance with fiscal rules and that at the same time they demonstrate a misunderstanding of the fundamental purpose of the rules. MP Suzana Lep Šimenko also explained what this “plastic budget planning” of Golob’s government is.
Member of the SDS Glade: Such actions of the ruling coalition are worrying and inappropriate
At the first presentation of the budget document, the finance minister announced that next year there will be no annual adjustment of social transfers, income tax scale and salaries in the public sector with inflation, but then the coalition changed this. This was pointed out by the member of the SDS Rado Gladek. “After the government meeting last Thursday, the minister says that for 2024, they agreed on a 70% adjustment of social transfers to inflation, which is still much worse than if social transfers were adjusted according to the currently valid regulation, which determines adjustment according to growth consumer goods, and that in full. They also lifted the ban on salary coordination in the public sector. However, there is still a freeze on the adjustment of the income tax scale. Such actions of the ruling coalition are alarming and inappropriate,” he said. Let us remind you that before Saturday’s finance committee, SDS and NSi proposed an amendment to adjust social transfers for the full amount of inflation, which the committee rejected.