ZAGREB, Nov 15 (Hina) - The Croatian government has suggested a consolidated state budget for the year 2002, to include pension and health insurance funds, in the amount of 76 billion and 887 million kuna (approx. USD9.22
billion).
ZAGREB, Nov 15 (Hina) - The Croatian government has suggested a
consolidated state budget for the year 2002, to include pension and
health insurance funds, in the amount of 76 billion and 887 million
kuna (approx. USD9.22 billion).#L#
Under a draft the government forwarded into parliamentary
procedure from Thursday's session, the total budgetary revenue of
the consolidated budget for 2002 will amount to 73 billion and 908
million kuna.
The government has also forwarded to parliament a document
formulating development priorities in the next two years, and a set
of bills, including a package on excise duties.
The budget for the first time includes pension and health insurance
funds, the Employment Bureau, and two new funds - for development
and employment and regional development.
Compared to this year's consolidated and revised budget, amounting
to 74.4 billion kuna, next year's budget is higher by 3.32%.
Finance Minister Mato Crkvenac says the total budgetary spending in
2002 has been set at 73.2 billion kuna, while the revenues have been
set at 70.3 billion.
When 25.18 billion kuna for pension and health insurance and
employment are deducted from that amount, the state spending
amounts to 48.019 billion kuna. These expenses, which amounted to
around 49.6 billion last and this year, will be reduced next year by
1.5-2 billion kuna, Crkvenac says. This means the share of the state
expenditure in GDP, not including the funds, will be 1.6% lower.
The main elements of the draft are a decrease in the total deficit to
4.25% of GDP (5.3% this year), a reduction in the current deficit
from this year's 4.5 billion kuna to around one billion in 2002, and
the reduction of debts from this year's 11.7 to 7.4 billion kuna
next year. Debt servicing in 2002 will continue to be high and the
country will have to pay 10.7 billion kuna of capital sum and
interest (this year 11.1 billion).
Privatisation in 2002 is expected to yield some 2.5 billion kuna,
which will not be used to cover state spending but directed into two
new funds, for development and employment, and regional
development. Certain budgetary assets will be transferred to those
funds as well.
Prime Minister Ivica Racan said the draft budget was development-
oriented and socially just. It is aimed at relieving the economy of
burdens, reducing state spending, stimulating development and
employment, resuming reforms, reinforcing economic stability,
strengthening the country's international rating and continuing
the reduction of foreign debts. The budget does not include cuts in
the salaries of budgetary users, he said.
Development and employment, the modernisation of economy, reforms
of the pension and health as well as farming, defence and judicial
sectors are some of the guidelines set in a document called
Croatia's Development Priorities 2002 - 2004.
Given the latest developments in the world, a reserve version of
economic growth is being drawn up. The current growth projection of
3-4% could fall to 1-1.5%, in which case the budget will have to be
reduced by three to four billion kuna, Finance Minister Crkvenac
said.
Government members endorsed the draft. Defence Minister Jozo Rados
said his ministry was following the government's general
orientation. The ministry's share in GDP in the 1999-2003 period
should decrease from 4.0 to 2.0 percent. The ministry is preparing
for the revision of the cost structure as too much money is spent for
personnel and too little for the modernisation of the army, he
said.
Along with the draft budget, the Government also forwarded to the
parliament a package of bills on excise taxes.
The bills propose an increase in excise duties given that as of
January 1 next year, customs rates for cars imported from the
European Union will be revoked. It has been suggested that excise
taxes on cars whose value does not exceed 50,000 kuna be increased
from the current five to 10 percent, that those on cars worth
between 50,000 and 100,000 kuna be increased from 10 to 20%, etc.
Under the bills, the price of cars worth less than 50,000 kuna would
be four to five percent lower, while the price of those worth more
than 200,000 kuna would rise between three and seven percent. The
price of cars imported from non-EU countries would also increase
from five to 20%. The effect on the budget would not be that
significant and it would amount to 75 billion kuna.
A more significant effect, worth some 460 million kuna, is expected
from the increase of beer excise taxes. Those taxes would increase
from the current 120 kuna per hectolitre to 200 kuna, which could
cause the prices of beer to rise by 12 percent.
Under a bill on changes to the Law on Excise Taxes on Oil Products,
part of the excises duties on oil products in the amount of 50 lipa
would be directed into road construction.
The government passed a decree whereby the guaranteed price of the
2002 wheat yield would remain at 70 lipa per kilogram.
($1 = 8.4 kuna)
(hina) sb rml