Govt adopts guidelines on division of 2020, 2021 budget fund
The cabinet set the upper limits for individual departments, which now have until 29 August to draft their financial plans for the two periods.
They will then enter talks with the Finance Ministry, after which the government is expected to confirm the final draft of the two-year budget and send the document to the National Assembly in September.
Speaking to the press after the government session, Finance Minister Andrej Bertoncelj admitted that there had been EUR 600 million worth of additional requests and wishes, but that the government had decided unanimously to stay within the set framework.
Announcing today's session, the Government Communication Office noted that this was the highest amount of expenditure in Slovenia's history, which would enable the government to pursue its priorities while securing balanced budgets in the medium term.
Capped in April by the National Assembly at EUR 10.45 billion, the expenditure for 2020 is EUR 290 million higher than in 2019.
Bertoncelj said that the cabined had pursued three key priorities - development, welfare and wages, bearing in mind both welfare and stability. He added that the fiscal rule had been fully respected.
According to the minister, the negotiations were not easy. "We said a determined no to excessive expenditure and squeezed it into the EUR 10.45 billion framework."
Out of the EUR 290 million increase in expenditure in 2020, slightly more than half will go for higher wages in the public sector, while the rest will be invested in development-oriented projects.
Despite what are to be record high budgets, coalition partners are not happy with the funds allocated to the ministries.
"Even if there were additional EUR 100 million available, there would still be dissatisfaction," said Igor Zorčič, deputy group head of the Modern Centre Party (SMC), after a coalition meeting this morning.
Franc Jurša of the Pensioners' Party (DeSUS) said that coalition parties are never particularly happy with the budget funds allotment. "It's true that this is the highest budget so far but it is also true that expenditure has increased due to higher public sector pay."
Matjaž Han of the Social Democrats (SD) was meanwhile critical of the Fiscal Council, saying the government's advisory body was halting investments.
He also expressed belief that social transfers were being lowered too slowly considering the high economic growth and the drop in unemployment.
Commenting on this, Bertoncelj said that "we had to stop at a certain point and that no one is fully satisfied, but no one should be dissatisfied either." All ministries bar the Finance Ministry will get more in general, he added.
The government also made the commitment today that it will take structural measures in the pension system, healthcare and labour market by 2022 in accordance with the recommendations from the European Semester.
The minister pointed to the upper limit for total public finance spending, which includes municipal budgets and the health insurance and pension funds, which will stand at EUR 21.48 billion next year or EUR 970 million more than in 2019.
The amount increases an additional EUR 680 million in 2021 to EUR 22.16 billion, and is set at EUR 23 billion in 2022. This points to the priorities in the pension and healthcare systems, Bertoncelj said.
The expected budget surpluses in the next three years are to stand at 1%, 1.1% and 1.2% of GDP, respectively, which according to the minister means that the government pursues the goal of structural balancing of public finances until 2022.
The goals is to bring the general government debt below 60% of GDP, under the limit allowed by the Stability and Growth Pact, he added.
Bertoncelj said that Slovenia was pace when it came to fiscal consolidation and reduction of debt, but added that the country needed to make an additional effort at the structural level.
"We must reach the planned surpluses," he said, adding that Slovenia was among the leading EU countries in this respect. "Let's spend less and surpluses will be even higher. There is enough money, but we must be economical."