The Slovenia Times

Parliamentary body calls for new concept of demographic fund

EconomyPolitics

Ljubljana - After discussing the government's Demographic Fund bill at the request of the opposition, the parliamentary Commission for Oversight of Public Finances decided on Friday that the concept did not provide a long-term sustainability of pension funding. It thus called on the government to draw up a new, better solution.

The bill, which faces its last hurdle in the parliamentary procedure next week, is being opposed by the Social Democrats (SD), Left, Alenka Bratušek Party (SAB) and the Marjan Šarec List (LMŠ), which said that the government was obstructing a public discussing on the motion.

Luka Mesec from the Left told the commission as the session started on Thursday that this was one of the most important bills in this government's term, as it would decide on the management of EUR 8.4 billion in state assets, but no public debate had been conducted.

He finds it the most problematic that the fund would not be used to sustain the pension fund. "The government is primarily concerned with a political battle for power over the managing of state assets," he said.

Finance Minister Andrej Šircelj disagreed. He said the issue had been discussed "one way or another" since 2013. "Several bills were filed and this is the first one that has made it to second reading," he said, adding the government had always been willing to discuss the concept of the fund.

The head of the Commission for Corruption Prevention, Robert Šumi, said the bill did not specify the criteria for the terms of supervisory and managing bodies. He also said it did not set the rules for pay.

Trade unions were also very critical of the bill and announced a referendum in case it is passed. Aljoša Čeč from the Pergam trade union said the bill envisaged no new sources of income for the fund while envisaging additional costs for tasks that a demographic fund should not be dealing with, including for building care homes.

Branimir Štrukelj, the head of the KSJS public sector union confederation, said the bill was about managing the last bit of state assets. "It's like having a fox watch over your chicken."

The head of the Association of Workers' Councils, Vladimir Šega, said both the younger and older generations would have their representatives on the supervisory board of the fund while employees would not.

Supreme state auditor from the Court of Audit Katja Božič said the bill encroached on the powers of the court by saying it would conduct audit of the fund. The Court of Audit is an independent institution and it chooses whom to audit, she said.

Andreja Zabret (LMŠ) was bothered by the fact that companies such as the railway operator Slovenske Železnice, the Official Gazette, the Slovenian Press Agency and others would be managed by the fund, which she believes would make them an easy prey for the government. She too mentioned the option of a referendum.

Andrej Rajh from the SAB echoed this and added that there would also not be enough money to finance other policies such as family policy.

Marko Pogačnik from the senior coalition Democrats (SDS) rejected claims that state assets would be transferred onto a single company. "The Demographic Fund will remain in Slovenia's ownership," he pointed out.

The commission adopted a number of resolutions today, including that the bill did not guarantee long-term sustainability of the pension system. It called on the government to present an analysis of a long-term impact of the proposal on public finance to the commission and the Fiscal Council within seven days.

It urged the Fiscal Council to voice its opinion on the analysis within seven days from receiving it.

The government was asked to respond within seven days to the opinion of the anti-graft watchdog, which said that the demographic fund as conceived by the government would be a deviation from what has been recognised as appropriate managing of corruption risks.

Finally, the commission called on the government to scrap the bill and prepare a better solution based on expert opinions and in social dialogue with stakeholders.

The bill passed first reading in mid-December last year. In line with the proposal, the demographic fund would allocate 40% of dividends from state-owned companies and 40% of the money from the sale of state investments for pensions. 10% of the dividends would go for financing elderly care and 10% for family policy measures.

The second reading is to be conducted at the plenary session starting on Monday.

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