ZAGREB, Nov 29 (Hina) - Croatian Prime Minister Ivica Racan told Wednesday's news conference the Government was "between a rock and a hard place". One problem was that it has to decrease budgetary expenses, increasing profit at the
same time, and the other are requests by one part of the people that their rights be increased, and the other that taxes be lessened," Racan said. During a break in government co-ordination discussions about the state budget for next year, Racan said the Government cannot cheat itself or others, so it must amend the budget so it is realistic and holds water, but which would not place additional burden on the economy. The discussions are focusing on decreasing budgetary expenditure by 2.5 billion kuna. Lesser would also be current and capital expenditures, as well as certain social rights. The first draft budget envisages expenditure for 50.87 billion kuna. In this draft as mu
ZAGREB, Nov 29 (Hina) - Croatian Prime Minister Ivica Racan told
Wednesday's news conference the Government was "between a rock and
a hard place". One problem was that it has to decrease budgetary
expenses, increasing profit at the same time, and the other are
requests by one part of the people that their rights be increased,
and the other that taxes be lessened," Racan said.
During a break in government co-ordination discussions about the
state budget for next year, Racan said the Government cannot cheat
itself or others, so it must amend the budget so it is realistic and
holds water, but which would not place additional burden on the
economy.
The discussions are focusing on decreasing budgetary expenditure
by 2.5 billion kuna. Lesser would also be current and capital
expenditures, as well as certain social rights.
The first draft budget envisages expenditure for 50.87 billion
kuna. In this draft as much as 12.5 billion would come from the
privatisation process.
However, Racan said, it is evident what is happening with
telecommunications in the world. The prices of stock in this
segment are falling and it is now clear we will not be able to
realise the planned profits from the second phase of privatising
the Croatian Telecommunications.
Besides a decrease in expenditure, discussed are also the
possibilities of increasing turnover by more than a billion kuna,
which would be realised through a more efficient income tax system,
and more engagement into the "grey economy".
The intention, he said, is to decrease budgetary deficit by about
fur billion kuna, or about 2.5 per cent gross domestic product.
The other hard place, Racan said, are demands for an increase in
contributions, and on the other side requests for tax reductions,
and this is a situation which the Government itself cannot
resolve.
He mentioned the example of unions of public services which are
requesting an increase in salaries. The Government, Racan said, is
prepared to fulfil its commitments stipulated by the collective
agreement, by which 8.5 per cent more funds would be paid, but is not
prepared to accept an increase in the basis for salaries as this
would mean an increase of next year's budget by 1.2 billion kuna.
When the Government asks for a consistent reduction of salaries in
public companies, it is threatened with strikes, Racan said,
stressing the Government was prepared to reduce their own salaries,
while others were not prepared to do so.
In the interest of citizens who are unemployed or in dire straits,
the Government is obliged to refuse such biased interests, he
asserted.
He stressed the Government was prepared for negotiations, but would
not accept threats. The Government will not yield before threats,
not even from its own public servants.
Racan said, however, that in this difficult situation he was
satisfied with the fact that true, livelihood issues, such as the
budget, are finally being discussed.
The Government co-ordination bodies continued their discussion on
the budget and a package of tax laws, while the co-ordination of the
six ruling parties will discuss the same issue this evening.
(hina) lml