The Slovenia Times

Govt confirms slightly reduced budget for next year


Announcing the confirmation of the draft budgets for the next two years, the government said it had increased expenditure compared to the previous years, while still following the principles of the golden fiscal rule.

"Both [documents] are development- and socially-oriented and compliant with the national fiscal rule," Bertoncelj told the press after the government session.

Originally, the upper limit for expenditure for 2020 was set at EUR 10.45 billion, or EUR 290 million more than planned for this year and the highest expenditure ever. In 2021, total expenditure in the state budget is planned to stand at EUR 10.455 billion.

The plans were made before the government macroeconomic think tank IMAD downgraded its gross domestic product (GDP) growth forecast for Slovenia from 3.4% to 2.8% for 2019 and from 3.1% to 3% for 2020 last week.

Following the downgrade, Bertoncelj said that ministries would need to reduce the planned expenditure for 2020 by a combined EUR 100 million.

This means that each ministry had to cut their budgets for next year by around 1%, with the finance minister giving them time to do so until today. "And they did this," Prime Minister Marjan Šarec said at today's press conference.

Budget users will nevertheless have a record EUR 10.35 billion at their disposal next year, and almost all of them will get more money than this year.

"This is the most important document, which the government is now sending to the National Assembly," Šarec said, adding that developments would depend on economic growth.

"For the time being, it looks like growth will be double the eurozone average, but we should not pretend not to see that a certain slow-down is coming; we are not talking about a crisis, but we should be attentive," said Šarec.

Bertoncelj added that the budgets were "good, not ideal, compiled optimally given the current circumstances".

According to him, the government will start this year with "preventive measures for reducing the wastefulness of the public administration", with the EUR 100 million cut along all ministries being the first agreed move.

The government also adopted today the budget implementation bill, which will also be sent to parliament.

By the end of October, the government will moreover adopt a draft budget plan and send it to the European Commission.

The government will also send to Brussels all required documents for assessment by the Fiscal Council, Bertoncelj added.

Šarec meanwhile said that he had not decided yet whether the passing of the budgets in parliament would serve as a vote of confidence in the government.

"I haven't decided yet on the vote of confidence, we have some more time. When the matter gets to the National Assembly, we will make a decision depending on the situation," he added.

The first reaction from the Left, the minority government's opposition partner whose votes would be all but crucial to pass the budgets, is that it is not clear whether the documents were really development- and socially-oriented.

Luka Mesec, the head of the Left, said that, to the party's knowledge, the claims by Šarec and Betroncelj about the orientation of the budgets did not hold true.

The government is abolishing the work activity allowance, and instead of investing in research and development, funds are going for defence, Mesec said, also noting that the Left had not been involved in budget talks.

According to him, the party's support depends on whether it will manage to agree with the government on its proposal to abolish supplementary health insurance, a flat-rate contribution that it wants to replace with a progressive tax.

Support will also depend on whether the budgets are truly development- and socially-oriented, and if they are not, the party will try to amend them in the parliamentary procedure, he added.


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