ZAGREB, Nov 9 (Hina) - The Croatian government on Thursday adopted a draft state budget for next year, amounting to 50.855 billion kuna (DM13.209 billion), and sent it into parliamentary procedure. It also forwarded to the parliament
fiscal projections for the next three years and a framework programme of development and stability of Croatian economy.
ZAGREB, Nov 9 (Hina) - The Croatian government on Thursday adopted a
draft state budget for next year, amounting to 50.855 billion kuna
(DM13.209 billion), and sent it into parliamentary procedure. It
also forwarded to the parliament fiscal projections for the next
three years and a framework programme of development and stability
of Croatian economy. #L#
The planned budgetary expenditure of 50.855 billion kuna is only
slightly (0.38 percent) higher than expenditure from the draft
revised budget for this year, which amounts to 50.66 billion kuna.
The draft budget for 2001 is oriented toward disburdening the
economy, reducing the budgetary share in Gross Domestic Product
(GDP) from this year's 30.8 to below 30 percent, said Finance
Minister Mato Crkvenac.
Another trait of the draft budget is its social sensitivity.
The budget secures all rights - it increases funds for soldiers,
displaced persons, civil and military war victims. Also increased
are funds for pension allowances - from this year's 4.49 billion to
more than seven billion kuna, child allowances, and health.
In terms of development, the draft budget is aimed at achieving the
maximum possible in agriculture, envisaging subsidies for
shipbuilding, tourism, export, small and medium-sized businesses,
and the continuation of the construction of the most important
facilities.
In order to preserve the existing rights, most of the burden will
have to be shouldered by employees receiving salaries from the
budget. Crkvenac explained that allocations for ministries with a
large number of employees will be reduced. The salaries of all,
starting with the highest officials, will have to be limited, he
said.
The draft budget for 2001 is also burdened with major
payments of the public debt, i.e. of previosly granted foreign
loans, which will amount to almost 12 billion kuna next year.
If the current budgetary expenditure of 50.855 billion kuna is
added to the capital sum of those loans, which matures next year,
the 2001 draft budget will amount to 59.268 billion kuna. Since it
will not be possible to cover said amount from the planned revenue,
a bill on the execution of the state budget would be adopted to
authorise the government to take a 6.3 billion loan on the capital
market.
The Finance Ministry estimates that total budgetary revenue next
year will amount to 53 billion kuna. Of that amount, taxes, mostly
Value Added Tax, will account for 38.2 billion. VAT, along with
taxes on real estate trade, is the only tax which is expected to
bring more revenue in 2001 than this year. The draft also includes
legal changes to income and profit tax, which will result in a
decrease of revenues from income and profit taxes by as much as 36.9
percent for instance for profit tax (this year 1.7 billion, next
year 1.1 billion kuna).
It is expected that extra-tax revenues will account for two billion
kuna, while as much as 12.7 billion is expected from privatisation.
These revenues will be used for expenditures and what poses a
problem is the fact that their growth raises the level of the
budgetary deficit, Crkvenac warned. Next year's deficit will
amount to six percent of GDP, and it would be desirable its share in
GDP were reduced by about 1.5 percent, he added.
This government stands or falls with a policy which can be defended
with real funds, Prime Minister Ivica Racan said. He therefore
believes that any discussion about the budget can be held only
within a determined framework, and include possible re-allocation
of funds but in no way the possibility of increasing the set limit.
As has already been announced, next year's budgetary funds will be
decreased for the defence ministry (8.21 percent), interior
ministry (8.6%), public works (18.6 percent), the Office of
National Security (UNS, 10.45 percent) etc. On the other hand,
funds for social care, science, education and culture will remain
the same or be increased. The budget also includes subsidies for
agriculture, shipbuilding and tourism.
The government today also adopted budgetary fiscal projections for
the next three years, aimed at reducing the state spending share in
GDP by some 10 index points. The fiscal projections, like the
framework development programme, are aimed at increasing the
employment rate. According to these projections, the number of
workers would increase by 60,000 between 2001 and 2003. Speaking
about areas which could create new jobs, Crkvenac said 'the
generators of development' could be some 30 companies (Pliva,
Podravka, Agrokor, Kras), as well as small and medium-sized
businesses, tourism, farming, food industry, etc.
The projections also envisage reducing the 'military' share in the
budget from the current 3.5 to 2.5 percent, which Defence Minister
Jozo Rados objected to. Any further cuts in these projections will
not be possible given our goals and integration into Europe and the
world, Rados said.
(hina) rml