GOVERNMENT DISCUSSES COLLECTION OF CONTRIBUTIONS

ZAGREB, March 11 (Hina) - The Croatian Government on Thursday discussed a programme of measures for a more effective collection of pension and health insurance contributions. The programme is aimed at securing consistent application of the existing rules regulating the payment of contributions and preventing employers from registering minimal wages and paying the rest of the amount in other ways, thus avoiding the payment of contributions. The programme, which was drawn up by a Government commission, includes draft changes to the existing laws, and - as medium-term measures - the expansion of the basis for the payment of contributions and the lowering of contribution rates. The measures suggest the expansion of the basis for the payment of contributions to temporary service contracts, author's fees, fees for members of supervisory and managing boards, trustees, expert witnesses, as well as fees paid by legal entities to students whom they employ through mediation agencies. The programme also envisages changes to a set of laws, such as those on pension and health insurance. According to the programme, it is necessary to process all those who are not paying regular contributions, in line with the Penal Law. Premier Zlatko Matesa stressed the Government's task was to see that all those measures are aimed at unburdening the system, expanding the basis of those obligated to pay contributions, and decreasing the contributions. One has to end the situation where those who are paying contributions are in a worse position than those who are avoiding it, Matesa said. He entrusted the ministers to draw up, for the next session, a programme of measures for their ministries. The minister of labour and social welfare was entrusted with holding a meeting with union representatives. Pension and health systems are very expensive and they are based on solidarity. This means that all those who are earning salaries have to pay contributions. Should this not be so, Croats will have to choose some other model, the Premier said. Economy Minister Nenad Porges said that the proposed programme was only dealing with the consequences. A permanent solution, Porges believes, is a quick and effective reform of pension and health insurance. Croatia belongs to a group of countries with highest obligatory contributions and long-term measures have to be directed towards lowering those rates and increasing tax-payers' morality, Porges concluded. Labour and Social Welfare Minister Joso Skara believes that measures for widening the basis of contribution payers should be thoroughly discussed. He recalled that the debt of the Pension Fund amounted to about US $600 million while about US$200 million have to be set aside every month for pension allowances. Health Minister Zeljko Reiner believes that pension and health funds are heading for collapse. Every month, the Croatian Health Fund collects US$121 million and its costs amount to some US$151 million. The inherited debts and those accumulating from month to month already amount to US$220 million. That is why Reiner believes that the collection of contributions has to be intensified. Finance Minister Borislav Skegro believes that health and pension funds have to strongly intensify the collection of contributions. Culture Minister Bozo Biskupic wanted to know about the purposefulness of the extension of contribution basis to author's fees, in the case of artists. (hina) rml