Parliament approves energy crisis relief package

Ljubljana – The National Assembly overwhelmingly approved on Tuesday the government package to mitigate the impact of high energy prices. As the coalition praised the bill and the wide range of beneficiaries during the debate, most of the opposition MPs also supported the bill, although they argued that the aid would come too late.

The energy relief package bill, meant to mitigate the impact of high energy prices for households and business entities, including agriculture, which was recently put forward by the government, was approved with 46 votes in favour and one against.

The bill stipulates that legal entities or individuals with a business registered in Slovenia by 1 December 2021 whose energy costs will increase by more than 40% in 2022 compared to 2021 will be eligible for government aid.

The sum of the aid will be limited at 60% of the damage suffered as a consequence of rising energy prices, while restrictions will also be imposed on businesses according to their turnover and energy costs as a percentage of operating expenditure.

Beneficiaries will have to submit all the necessary information to the Financial Administration (FURS) by 15 April, and FURS will pay out the aid by 5 May.

The bill thus provides for EUR 70 million in aid for around 40,500 beneficiaries, while it also provides for a postponement of the deadline for the submission of corporate tax returns by one month, to 30 April.

The coalition MPs supported and praised the bill during Monday’s parliamentary debate, saying that it “provides the necessary support from the state at a key moment” and “takes into account the needs of citizens, business and agriculture”.

Meanwhile, the opposition mostly criticised the time that was taken to draw up the relief package, arguing that the bill was “turned upside down” during the procedure with so many amendments.

Several opposition MPs expressed the sentiment that businesses have been waiting for aid for too long, as “many companies have already suffered significant costs increases in 2021”.

The energy relief package covers a wide range of beneficiaries. Before the parliamentary debate switched to aid for businesses and agriculture, the MPs also discussed the bill’s primary focus – government aid for households and citizens.

The bill provides for a one-off payment for some 710,000 Slovenians, equalisation of the rights of all household consumers, and a temporary three-month exemption from contributions and network charges, which is expected to reduce bills by around 30%.

The aid will be received by around 465,000 pensioners with monthly pensions under EUR 1,000, around 67,000 people entitled to social assistance or disability benefits, and around 139,000 recipients of child benefits in income tax brackets 1 to 6.

In addition, the bill also provides for aid for around 26,000 recipients of the allowance for large families and foster carers, while around 6,000 people with four or more children will receive an additional EUR 50.

“The goal is to help the most vulnerable groups of citizens,” Infrastructure Minister Jernej Vrtovec said during Monday’s debate at a two-day emergency session of the parliament.

He added that each beneficiary will receive an energy voucher worth EUR 150, and that the total value is expected to be EUR 106 million. The aid is to be paid out of the Climate Change Fund on 15 April, nine days before the general election.

“Doubts remain as to why the government reacted so late, or rather, almost too late,” said Soniboj Knežak of the opposition SocDems (SD). Thus, he said, the question arises if this is another pre-election manoeuvre by the ruling coalition.

Edvard Paulič of the opposition Marjan Šarec List (LMŠ) considers the proposed method of allocating the aid unfair, and he also questioned the date of the expected disbursement.

The opposition Left MP Nataša Sukič added that since the aid is urgently needed, the party will not oppose the bill, while rthere are still several issues, including the aid being paid out of the Climate Change Fund, which is “not meant to alleviate social hardship, but to create a greener future”.

Meanwhile, the biggest problem of the proposal as seen by the opposition Alenka Bratušek Party (SAB) is that aid will be received by some who do not actually need it.

They also argued against the government’s decision to allow for a temporary exemption from paying network charges, a decision which was criticised by the Energy Agency as well.

The SAB has proposed that the state temporarily reduces the VAT on energy products instead, which would help to avoid a request for a constitutional review of the bill that was reportedly announced by an association of small shareholders.

Indeed, the Association of Small Shareholders said it would ask for a constitutional review and staying of the provision relating to the reduction of tariffs, while adding that it did not want to suspend the introduction of the energy vouchers.

The dispute is only about the financing of the expected loss of revenue from network fee, the association said, adding that this should be covered from the budget or other systemic sources, and not from the regular revenue of limited liability companies.

Janja Sluga of the group of non-affiliated MPs added that “in recent months, the government has been busy with aggressive staffing and political profiteering in the energy sector, rather than mitigating the effects of the energy price hikes”.

The opposition also pointed out that they had already put forward their own proposal to mitigate the impact of high energy prices last October, but the coalition rejected it at the time.