LOWER HOUSE DISCUSSES FINAL DRAFT BUDGET FOR 1998

( Editorial: --> 8697 ) ZAGREB, 16 Dec (Hina) - The Croatian Parliament House of Representatives opened an extraordinary session on Tuesday. The session was called at the request of the Government, to deal with the final draft of the state budget for 1998. The lower house is going to express their opinion on the final bill on budget execution as well. Planned revenue and budgetary deficit have not been changed and remain the same as in the first draft budget. Following a parliamentary discussion and talks between the Government and trade unions of government employees, the Government has decreased and re-distributed certain budget items. These changes amount to 342 million kuna (some US$55 million). The largest increase of 295 million kuna (some US$47.58 million) was proposed for government employees' salaries, not including the salaries in the Ministry of Defence and Interior Ministry, Finance Minister Borislav Skegro said at today's session. Government budget reserves have been decreased by 63 million kuna (US$10.16 million). Expenses for business trips have also been cut by 73 million kuna (US$11.77 million). Representational expenses have been cut by 1.7 million kuna (US$274,000). Expenses for the purchase of furniture and equipment have been decreased by 7.7 million kuna (US$1.24 million). Expenses for the purchase of vehicles have been cut by almost four million kuna (some US$645,000), while other expenses have been reduced by 2.5 million kuna. Expenses of the Reconstruction and Development Ministry have been reduced by 100 million kuna (US$16.13 million), but that will be compensated by the sale of 200 million kuna of shares from the Croatian Privatisation Fund portfolio, said Minister Skegro. The development of the housing fund will be financed with the additional 100 million kuna in 1998. The largest reduction, amounting to 150 million kuna, (some US$24.19 million), has been introduced in military expenses. Assets in the Defence Ministry have been redistributed in such a way that expenses for salaries have been reduced by 428 million kuna (some US$69 million), while assets for the modernisation of the Croatian army have been increased by 278 million kuna (US$44.8 million). Expenses for the Ministry of Croatian Defenders, aid to civil victims, psychological aid and exhumation of remains, have been increased by 45 million kuna (some US$7.2 million). Skegro said that the Government would lessen the impact of value added tax on the publication of books with the additional 10 million kuna (US$1.6 million). The final draft budget was supported by all parliamentary committees, but some of them proposed that certain items be additionally increased or redistributed. The draft budget for 1998 was based on the estimation that economic growth in the next year would be at 7% and the inflation rate at 3% to 3.5%. According to the draft budget, the budget would amount to 38.8 billion kuna (US$6.258 billion), which is 8.5% more than the 1997 budget and amounts to 30.94% of the estimated gross national product for the next year. The budget revenue has been estimated at 36.8 billion kuna (US$5.935 billion) while the budget deficit has been estimated at 2.01 billion kuna (some US$324 million), which is 1.6% of the GNP. (hina) jn rm 161422 MET dec 97