LOWER HOUSE ENDS DISCUSSION ON DRAFT BUDGET FOR 1998

( Editorial: --> 8739 ) ZAGREB, 16 Dec (Hina) - The Croatian Parliament House of Representatives discussed the final draft budget for 1998 on Tuesday. Representatives of the Croatian Democratic Union (HDZ) supported the draft budget, while opposition representatives presented a set of objections. HDZ representatives estimated that the draft budget was conceived so as to maintain the continuity of the Government's economic policy, support development and the solution of social problems. MP Djuro Njavro of the HDZ said that the proposed budget registered a low budget deficit. The draft budget also guaranteed that Croatia would continue a period of low inflation and a period which stimulated the continuation of economic growth. Njavro stressed that the Government had carried out numerous changes in the draft budget between the two readings, economising whenever it was possible. The Croatian Peasants' Party (HSS) said the budget was unacceptable. Zlatko Tomcic of the HSS said that the proposed budget was neither of social nor of developmental character, nor was it sufficiently taking care of the reconstruction and return. Tomcic proposed that linear decrease of all expenses take place and that the expenses be cut by a total of 1.2 billion kuna. Out if that amount, 500 million kuna should be directed into the removal of negative consequences of the application of value added taxes on the most destitute categories of population. A further 500 million kuna should be used for subsidies in agriculture, and 200 million kuna should be used for reconstruction and development, Tomcic said. The HSS also proposed that the Law on Value Added Tax be changed as well. Damir Kajin of the Istrian Democratic Party (IDS) proposed that a temporary budget for the first three months of 1998 be adopted. During that time, the economic and social policy should be discussed, Kajin said. According to Kajin, the main priority in the draft state budget should be the creation of new jobs. There were 260,000 unemployed in Croatia in 1996, and that number rose to 280,000 in 1997, Kajin said, adding that budgetary means for employment were being reduced. The worst problem was that the proposed budget was becoming a mechanism of pressure on certain areas, which, Kajin said, had not and probably would not vote for the governing party. Dragica Zgrabec of the Social-Democratic Party (SDP) said that the Government did not have a macroeconomic strategy. The state was becoming the main financier, investor and employer, she said. Anto Djapic of the Croatian Party of Rights (HSP) strongly criticised the reduction of financial means for the Defence Ministry. Jozo Rados of the Croatian Social-Democratic Party (HSLS) said the budget was too high. Answering to the objections, Finance Minister Borislav Skegro said that the proposal on the linear reduction of expenses was acceptable at first sight, but after a more deep analysis of the budget it was visible that more than 80% of the expenditure was inevitable. Answering a question on where the expenses for the purchase of a presidential plane was 'hidden' in the budget, Skegro said that those expenses were included in the Defence Ministry item, because the purchase of the plane was connected with another purchase of the Defence Ministry. The Government would consider all proposals presented by the lower house, Skegro said. The Government would abide by its statement that value added tax would not jeopardise publishing, Skegro reiterated. It is necessary to define the form of publishing which should be stimulated, but it is also clear that the Government will not spend money on something that does not belong to publishing, he said. (hina) jn rm 161631 MET dec 97