LOWER HOUSE DISCUSSES GOVT REPORT ON BUDGET EXECUTION

( Editorial: --> 4342 ) ZAGREB, Sept 30 (Hina) - The Croatian National Parliament's House of Representatives on Wednesday continued its session with a discussion on a government report on the execution of the state budget in the first six months of 1998. The bench of the ruling Croatian Democratic Union (HDZ) endorsed the government's assessment that this year's budget stimulated development and was socially positive, that the planned economic growth was being realised, and that the introduction of Value Added Tax (VAT) had given good results. Opposition parties were of the opinion that public expenditure was too high, the state expensive, unemployment high, and that nothing was being done to overcome insolvency. The opposition also said that tax pressure was big, and that with the introduction of the VAT the state was sucking money out of the economy. If we have surplus income, are tax cuts not the most sensible thing to do, the opposition inquired, reiterating demands to reduce the uniform VAT rate of 22 per cent and introduce several rates. Deputy Finance Minister Mijo Jukic said the VAT rate would not be cut, but pointed out that other taxes would be cut. The VAT is a tax on consumption and will have to be paid by both the rich and the poor, Jukic said, adding the poor would receive money from the state budget through social programmes. The Liberal Party (LS) bench remarked that the government report brought no data on insolvency, unemployment, and the business of budget-subsidised companies. Agreeing with the LS, representatives of the Croatian People's Party (HNS) and the Istrian Democratic Forum (IDF) were of the opinion that it was high time for the government to reduce the central budget and increase budgets for local self-government and government units. There is no economic progress without this, the said. Representatives of the Croatian Social Liberal Party (HSLS) said that at 48 per cent of the gross national product public expenditure must be reduced. They proposed a radical budget revision. Representatives of the Social Democratic Party (SDP) said the supervision of state money spending was poor. The HDZ bench warned that this year US$4.6 billion out of a total of US$10.6 billion had been directed towards pension and health insurance funds. Those advocating reduced expenditure should also consider this figure, the HDZ bench said. (hina) ha jn/sp 301857 MET sep 98