The Government also sent to Parliament bills on profit and income tax laws.
Prime Minister Ivo Sanader said the draft national budget showed the Government would support the macroeconomic stability by reducing the national deficit and consolidating public finance.
Finance Minister Ivan Suker said next year's national deficit was expected to account for 3.7 percent of Gross Domestic Product, down 2.6 percent from last year's deficit. He added the 4.5 billion kuna deficit would be covered with revenue expected from privatisation.
Suker said debts amounting to 12.3 billion kuna would have to be serviced in 2005, interest would come to 4.5 billion, while an additional 3.2 billion would be required to finance the deficits of the Croatian Highways (HAC) and Croatian Roads (HC) companies, which he added meant that next year the Government would have to borrow 19.8 billion kuna.
The finance minister dismissed all criticism that investment in road-building would be low, saying that 4.9 billion kuna would be invested in HAC and 2.1 billion in HC.
The prime minister said the 2005 budget reflected the Government's efforts to tackle all structural reforms, both in administration and the judiciary, while agriculture and infrastructure projects would also play an important role. He added the budget also reflected the Government's promises regarding social issues and spending on childbirth allowances, war veterans, etc.
The Science and Education Ministry is expected to be allocated 8.7 billion kuna, the Sea, Transport and Development Ministry 6.2 billion, the Family and War Veterans' Affairs Ministry close to six billion, the Justice Ministry 1.9 billion, and the Agriculture Ministry 2.8 billion kuna.
The institutions including the pension and health insurance funds are expected to be allocated the highest amounts -- the Economy Ministry nearly 26 billion and the Health Ministry 18.1 billion kuna.
The Defence Ministry is expected to receive 3.6 billion kuna, and the Interior Ministry 3.4 billion.
While most ministries are expected to be allocated 4-5 percent more money than this year, funds for Parliament are expected to be 72.4 percent higher, totalling 232 million kuna.
If Parliament agrees, the Government will be allocated 176 million kuna in 2005, up 12 percent from this year, while the President's Office will receive 44.6 million kuna, up 15 percent.
For the first time, the Government enclosed with the draft 2005 national budget projections for the 2006 and 2007 budgets, which Sanader said provide realistic conditions for the Government to be able to meet its pledge to make Croatia move forward.
Under the income tax bill, the amount of the monthly salary that is not subject to taxation will be raised from 1,500 to 1,600 kuna, which will cut national revenue by some 870 million kuna, said the finance minister.
He added the bill also proposed that tax relief could be a maximum 12,000 kuna and regulated the taxes to be paid by athletes and artists.
Suker said the taxation of dividends and one property write-off would be excluded from the profit tax system, which would earn the state 780 million kuna.
(EUR1 = 7.5 kuna)