ZAGREB, Sept 21 (Hina) - A government report on the execution of the budget in this year's first six months gave rise to various remarks about the economic situation in the country in Parliament on Friday. The Opposition's Croatian
Democratic Union (HDZ) believes that state finances are in crisis, while the government thinks the situation is not that worrying. Budgetary expenditure for salaries was five percent higher than planned in the first six months, while 77 percent of overall funds for the payment of child allowances has already been spent, Deputy Finance Minister Damir Kustrak said. Income tax revenues are lower than last year, which he said was the result of the introduced lower income tax rates. Although profit tax rates have also been decreased, the tax revenues have increased in relation to last year, which proves that companies are doing better, Kustrak said. He said the collection of the
ZAGREB, Sept 21 (Hina) - A government report on the execution of the
budget in this year's first six months gave rise to various remarks
about the economic situation in the country in Parliament on
Friday. The Opposition's Croatian Democratic Union (HDZ) believes
that state finances are in crisis, while the government thinks the
situation is not that worrying.
Budgetary expenditure for salaries was five percent higher than
planned in the first six months, while 77 percent of overall funds
for the payment of child allowances has already been spent, Deputy
Finance Minister Damir Kustrak said.
Income tax revenues are lower than last year, which he said was the
result of the introduced lower income tax rates.
Although profit tax rates have also been decreased, the tax
revenues have increased in relation to last year, which proves that
companies are doing better, Kustrak said. He said the collection of
the Value Added Tax was good, considering the introduced zero VAT
rate for organised tourist visits to Croatia.
Budgetary revenues from the privatisation of companies have fallen
short, but most of the funds from the sale of the Croatian Telekom
are expected to pour into the budget next month, the deputy minister
said.
He stressed that the budget situation had improved since June,
which was the result of a tactile growth of industrial production, a
15% increase in tourist overnight stays, and the revived
construction industry.
On behalf of the HDZ MPs, Ivan Suker said that state finances were in
crisis because the budgetary deficit in the first six months had
reached 4.3 billion kuna (US$531.5 million), and the government's
debts had grown by 12.24 billion kuna (US$1.51 billion) in the first
eight months.
Suker also warned about the growth of the public debt from 46.7
billion kuna (US$5.77 billion) to more than 70 billion (US$8.65
billion). At the same time, short-term loans reached 5.68 billion
kuna (US$702 million), he said.
Zlatko Matesa of the HDZ said that instead of a hasty privatisation
of companies, the government should consider selling the property
of the Defence Ministry which he described as "the biggest hotel
company in Croatia", as it owned facilities with 7,500 beds, and its
property was estimated at four billion kuna (about half a million
dollars).
At the end of the discussion, Deputy Finance Minister Damir Kustrak
said there was no reason to be dramatic about the public debt, and
added the debt was increased because of the financing of debts
inherited from the former government structure.
In 1999 (during the rule of the HDZ), the budgetary deficit amounted
to 7.5 percent of the GDP, which is a record in the country's
history, Kustrak stressed. This government has inherited enormous
amounts of unpaid debts, he asserted.
Kustrak recalled that this year's budgetary deficit was planned at
about 5.3 percent of the GDP, and that the public debt would be
decreased in the second half of the year with profit from the
privatisation of state-owned companies, such as the Croatian
Telekom.
(hina) lml sb