ZAGREB, June 27 (Hina) - Decentralisation, the transfer of pensions into the budget, the reduction of the income from privatisation by two billion kuna and the government's authorisation to incur additional debts of 2.8 billion kuna
were the chief features of a draft revision of the state budget forwarded by the Ivica Racan Cabinet into the parliamentary procedure.
ZAGREB, June 27 (Hina) - Decentralisation, the transfer of pensions
into the budget, the reduction of the income from privatisation by
two billion kuna and the government's authorisation to incur
additional debts of 2.8 billion kuna were the chief features of a
draft revision of the state budget forwarded by the Ivica Racan
Cabinet into the parliamentary procedure.#L#
According to the revision, the government will increase its planned
expenditure of 49.7 billion kuna by 17 percent (i.e. 8.46 billion
kuna) to 58.1 billion kuna.
The planned revenues will increase by 11.3 percent (or 5.6 billion
kuna) to 55.3 billion kuna.
To cover this budgetary deficit, the government has forwarded into
a parliamentary procedure draft amendments to the act on the
execution of the budget.
Under the draft amendments, the government asks the parliament to
give the green light for contracting additional debts of 2.8
billion kuna on Croatian and foreign markets. As a result, the debt
accumulation will increase from the planned 7.9 billion kuna to
10.7 billion.
Under the draft revision, the government will contract 2.5 billion
kuna of short-term debts at home to cover the budgetary deficit, and
the rest of 360 million will be taken from abroad within an increase
in loans from the World Bank for the structural adjustment and
investments into the pension system.
By running into debts the government will secure means which it has
not managed to obtain through privatisation.
The government admits that it has overestimated possible earnings
from the planned privatisation. According to previous plans, the
government believed that it would manage to secure 8.5 billion kuna
from the sale of the state-owned assets. It has, however, realised
that it will probably secure 6.5 billion kuna in that way, and those
two billion kuna will be covered by debts.
"All activities, however, have not been over for the
materialisation of the planned revenues from privatisation. All
necessary efforts will be made to ensure those earnings as high as
possible and debts as low as possible," read an explanation of the
revision.
The inclusion of the Croatian Institute for Pension Insurance
(HZMO) into the budget as of 1 July means that contributions for the
pension insurance will be paid through the state treasury. This
should ensure 7 billion kuna within the budget receipts.
Thus, the means will be ensured for the payment of the pensions
(except those who are paid from abroad and will be still transferred
via the HZMO) for covering salaries and material and other costs of
the HZMO.
Consequently, the HZMO's debt of 1.166 billion kuna will be
transferred into the budget as well. In addition, the government
will assume the obligation to cover the current liabilities of the
HZMO towards commercial banks, which came to 770 million kuna on the
last day of 2000.
As of 1 July, the process of the fiscal decentralisation will start
and 605 million kuna should be ensured as assistance to local units
to finance education, health care and social welfare. The necessary
amount for the decentralisation should be collected from profit and
income taxes.
According to the government's explanation of the budget's
revision, there is additional pressure on budget items regarding
the earmarking of means for salaries, child's allowance and the
covering of the HZMO deficit.
At the beginning, there were plans to cut budgetary means for
salaries by 10 percent and this implied that the means which should
be allocated for salaries from the budget would be lessened by 1.7
billion kuna this year as against 2000.
Thanks to new co-efficients and bases for the salaries, substantial
economy of means was reached in June, but it was still insufficient,
the government warned.
Therefore additional measures will be taken in order that the
government can achieve the planned economy of means in the fund for
salaries, the government said.
The revision of the budget is on the agenda of the ongoing session of
the Sabor.
(hina) sb ms