Rebalancing Budget 2014: Just Accounting Operation?
The supplementary budget is increasing deficit to EUR 1.2m, which is almost EUR 200m more than was envisaged in the original budget, the opposition pointed out, calling for reforms.
The proposal reduces budget revenue by EUR 20m to EUR 8.6bn while increasing expenditure by EUR 177m to EUR 9.8bn.
Apart from the deficit, public debt will also increase, Andrej Šircelj of the opposition Democrats (SDS) said. "This undermines our credibility in the eyes of the EU, as this is not in line with the promise we have made."
Tilen Božič of the ruling Miro Cerar Party (SMC) replied that the proposal mainly included technical adjustments. The deficit will indeed increase by almost EUR 200m, but EUR 150m of that will go for the paying off of interests, which were set too low in the original budget, he explained.
SDS MPS Marko Pogačnik labelled the supplementary budget "unrealistic" and "inappropriate". The deficit is increasing, despite the fact that the original budget was based on significantly worse economic forecasts than Slovenia has now, he argued.
This was confirmed by Boštjan Vasle, director of the Institute of Macroeconomic Analysis and Development (IMAD), who said that Slovenia had had six quarters of non-negative economic activity.
Encouraging signals come from the economy and the projections for the future are very favourable, he added.
The situation in the labour market has also been improving this year and the projected 2% economic growth could even be exceeded, according to Vasle.
But he cautioned against too much optimism, saying that Slovenia would have to further boost its performance if it were to catch up with the more developed countries.
Šircelj too warned that the economic trends could turn downwards again if the country failed to put its public finances in order.
While several MPs voiced criticism that the supplementary budget for the current year is being processed so late, Finance Ministry State Secretary Mateja Vraničar said that it was required to ensure transparency of budget implementation.
Since it is nearly the end of the year, the government could not make any structural changes but could only propose savings or redistribution of funds where possible, she explained.
New calculations estimate tax take to the tune of EUR 6.6bn, nearly EUR 232m less than originally planned, the main reason being the annulment of the real tax act, which was to fetch EUR 205m.
Tax revenue is down due to lower estimated take from the personal income tax and excise, but plans have been trumped in value added tax and corporate income tax.
On the expenditure side, transfers to the pension purse are being increased by EUR 124m to EUR 1.6bn. More funds are also being earmarked for public railway and road transportation services, the closure of the Trbovlje-Hrastnik coal mine, as well as research and compensation payments, such as to the erased.
The opposition, unhappy with the absence of Finance Minister Dušan Mramor at today's session, filed seven amendments to the supplementary budget proposal, which would redistribute a total of EUR 44m.
The SDS wanted the state to allocate more money to railways, water management and budget reserves, while the opposition New Slovenia (NSi) would give more for local infrastructure, tourism promotion and family policies.
All amendments were however rejected by the committee.
The parliamentary working bodies debated the supplementary budget from Tuesday to Friday, while parliament is to adopt the revised budget at the plenary that will get under way on Monday.