Expenditure will remain within 92 billion kuna, with over a billion kuna to be re-allocated among budgetary spending items.
Finance Minister Ivan Suker said that budgetary revenue had been reduced because of an increase in a budgetary deficit from the planned 3.7 percent to 4.2 percent of Gross Domestic Product.
The new budgetary revenues are based on the real economic growth of 3.7 percent as well as on the revenues collected so far, namely on the poorer collection of Value Added Tax and excise taxes. The collection of these revenues is better than last year but still not as it was planned in the projections of the budget so we opted for a more conservative approach in order to avoid difficulties at the end of the year, the finance minister said.
As regards the re-allocation among spending items, the majority of the budgetary money will go to pensions (additional 340 million for civil and 129.4 million for war veterans' pensions) and to wages (additional 346.4 million kuna). Suker said that expenses for wages and pensions would grow by 4.4 billion kuna, comparing to 2003.
According to the budget revision, the state will support housing savings with another 70 million kuna, allowances for the unemployed will go up by 60 million kuna, additional maternity leave benefits by 38.7 million and permanent rights of Croatian war veterans by 35 million kuna.
At the same time the revision foresees the reduction of expenses for the supply of non-financial property (by 295.9 million kuna), material expenses (by 223 million), assistance for abroad and within the general state system (by 149.8 million), various allowances for citizens (by 111 million) and subsidies (by 84.5 million).
The finance minister said the government would as early as this week move amendments to the law on stimulated housing savings by which state stimulating funds would be reduced from the current 25 to 15 percent. He said this would be done because over the past eight years the state allocated 1.08 billion kuna for this purpose, while savings banks approved only 350 million kuna for loans which is nearly three times less.
Also amended would be the government's action plan for employment which failed to yield the expected results, according to Suker.