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The general government deficit is to reach 3.5%-4% of GDP, from 6.4% at the end of last year.This year's expenditure is being cut to a little over EUR 9bn or EUR 1.1bn less than in the original budget that was passed at the end of 2010, the implementation of which was frozen. Revenue is projected at EUR 7.9bn which is about EUR 0.5bn euros less than originally planned.
Compared to actual spending last year, expenditure is being cut by a little less than EUR 400m however, since the cost of interest payments will rise substantially, the government is cutting spending by about EUR 800m through measures outlined in the omnibus bill on balancing public finances. The government had started economising on material costs but since this was not sufficient, it made changes to the legislation governing public expenditure.
The most significant cuts were initially planned in the funding of development and education but due to public criticism, the coalition allocated EUR 20m back into science and research.
The Education, Science, Culture and Sport Ministry were returned EUR 29.2m, and the Labour, Family and Social Affairs Ministry got EUR 20m returned. Due to an agreement the government reached with the social partners, the effect of the austerity measures for cutting budget expenditure will be EUR 130m lower, according to Finance Minister, Janez Šušteršič.
This will be balanced from other parts of the budget, partly with amendments to the supplementary budget (around EUR 50m) and partly through the subsequent act on the implementation of the budget, the Minister said. The supplementary budget does not yet take into consideration some of the organisational changes in the public administration and the effect of some of the newly introduced taxes such as taxes on real estate, expensive vehicles and vessels. During the debate, the coalition MPs labelled the supplementary budget as an urgently needed measure and a precondition for further economic growth, while the opposition criticised it as being unrealistic and uncoordinated.