Fiscal Council voices reservations about pension law changes
The Fiscal Council says that its own calculations, as well as those it received from the Ministry of Labour, the Family, Social Affairs and Equal Opportunities, indicate a substantial increase in expenditure.
"Based on the projections of the Report on Ageing 2018, the costs of ageing in Slovenia are to increase by nearly 5 percentage points of GDP gross by 2040.
"With the passage of the proposed legislation, the costs are to rise by about one additional percentage point of GDP and grow even higher in the following years," said the Fiscal Council.
Without an appropriate response in terms of economic policy, these changes would increase the country's deficit immediately after being passed and "by more than 1 percentage point of GDP a year after 2040". This would also cause additional increase of the general state deficit by a percentage point a year.
The Fiscal Council thus urged the government once again to present publicly and transparently projections extending further "than the usual horizon of public finance legislation presentations".
"These changes involve measures whose financial effects are relatively small in the medium-term, also due to their gradual introduction, but accumulate and become substantial over time."
The Fiscal Council thus believes the changes also call for measures to guarantee long-term sustainability of public finance. The measures should "apply not only to the reform of social security parameters but a variety of fields to address comprehensively challenges of a long-lived society".
Drafted by the government, the changes were in public debate until the end of August. Among other things, they include an increase of pension base for those who worked for 40 years. Moreover, pensions would increase for parents.
Commenting on the appeal, Labour Ministry State Secretary Tilen Božič said the Fiscal Council's warnings were welcome and were being taken into account so the government was working on alternative measures.
The government wants to assess the proposals from the aspect of negative and positive impacts they would have on public finances, he told the press on the sidelines of a coalition meeting in Brdo pri Kranju.
Božič announced additional calculations would be released soon to show what changes the proposals brought for the pension budget and all the other public budgets.