The Slovenia Times

Growth and Financial Stability Main Goals of Reform Programme

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The draft is to be sent to social partners and relevant parliamentary committees on Monday.

Speaking to the press after the session, Finance Minister DuĊĦan Mramor discussed the measures the government plans to take to stimulate growth, including the elimination of red tape, a tax reform and deregulation of professions.

The planned measures also include better management of state-owned assets, prudent privatisation, structural measures in health care, labour marker and pension system, as well as encouraging investment through a more efficient use of EU funds and national budget.

When it comes to public finance, Mramor mentioned the planned adoption of a law implementing the golden fiscal rule and a new law on public finance, an analysis of the efficiency of public finance spending and long-term changes in the structure of expenditure, with the objective of balancing out the budget by 2020.

Public Administration Minister Boris Koprivnikar added that short-term austerity measures needed to be replaced with long-term structural measures.

According to Mramor, ministries have been tasked with establishing which measures should be continued with and which replaced. "Those that need to be replaced with structural measures, will be replaced...by the end of the month."

Regarding public sector wages, Koprivnikar said that the available funds needed to be used and redistributed to in a way to incentivise public servants. All the existing measures cannot be eliminated, as the current economic growth would not cover for this, he added.

When it comes to social transfers, the minister said that it should be determined which groups are vulnerable and what needs have to be addressed, within the financial possibilities. It is impossible to lift all restrictions over night, according to him.

Mramor added that the current favourable trends meant that a reduction of the wage bill for the public sector is not planned, but he also warned against overestimating the effect on economic growth on public finance.

The finance minister explained that growth in Slovenia is based largely on exports, which do not bring VAT revenue, and that the relatively low inflation does not help either.

Mramor expects revenue from a new real estate tax in 2017, and from tax-certified cash registers even earlier. Up to EUR 100m in additional annual revenue is expected.

The head of the coalition Pensioners' Party (DeSUS) and Foreign Minister Karl Erjavec meanwhile said he was happy that the state-run pension fund KAD will not be abolished and that a demographic fund will be established.

"We want to secure funds for indexation of pensions from KAD and the demographic fund, where 10% of the proceeds from privatisation will go directly," he told the press, adding that pensions are "safe for now".

Erjavec expects that pensions in January will be adjusted to economic growth for 2014, as the growth exceeded the 2.5% threshold agreed with Prime Minister Miro Cerar.

The draft programme is expected to be sent to Economic and Social Council, Slovenia's main industrial relations forum, and relevant parliamentary committees on Monday.

The document, together with the stability programme, which defines the financial effects of the planned measures, is to be sent to the European Commission by the end of the month.

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