Presenting the report, the head of the Council for the Protection of Market Competition, Olgica Spevec, said that last year subsidies totalled 6.5 billion kuna, which was about 13 per cent more than in 2004 and eight per cent more than in 2003.
"The increase is mainly due to the increase of subsidies to the transport sector, agriculture and fisheries," Spevec said, adding that state subsidies amounted to around 4,570 kuna per employee in 2005.
She went on to say that subsidies intended for regional development were increasing and that they should be expected to grow further due to investment in regions lagging in development.
Parliamentary parties said during the debate that given Croatia's progress to European Union membership the system of subsidies should not be a threat to the national economy.
Krunoslav Markovinovic of the ruling Croatian Democratic Union (HDZ) said that the adjustment of subsidies to the EU system was sensitive work and that it was hard to achieve a balance.
"The question is to what extent the subsidised Croatian economy poses a threat to the EU market, and vice versa, to what extent the European Union is destroying the Croatian market without subsidies," Markovinovic said.
Tonci Tadic of the Croatian Party of Rights (HSP) said that adjusting subsidies to the interests of the European Commission without receiving money from European funds would be "damaging to say the least."
Deputies also discussed the report on the work of the Croatian Energy Regulatory Agency and continued the session with a debate on a proposed national population policy.
(1 euro = 7.33 kuna)