Government sends draft 2010 budget to parliament

The Croatian government on Saturday forwarded to parliament a draft 2010 budget which envisages revenues of HRK 112.8 billion, up 1.5 per cent from this year, and expenditures of HRK 121.4 billion, 904 million more than this year.

"I believe this can be a stable budget for 2010, primarily for strengthening the economy and directing budget funds to those who really need it," said Prime Minister Jadranka Kosor.

The 2010 budget projects a 0.5 per cent GDP growth and a central government deficit of 2.5 per cent of GDP.

Revenue from VAT is expected to grow 5.4 per cent to HRK 38.8 billion, and revenue from excises by 3 per cent to a little under HRK 11 billion.

Finance Minister Ivan Suker warned that due to the economic downturn and the negative impact of the economic crisis, next year's revenue from profit tax was expected to drop 13.4 per cent to HRK 8.2 billion, from income tax by 1.1 per cent to HRK 1.5 billion, and from benefits by 1.1 per cent to HRK 40.3 billion.

The draft is in line with the attempts made in this year's three budget revisions, namely economising at all levels and giving up everything that can be done without, said Kosor.

She explained that expense account costs would be cut from HRK 50 million to some 30 million, material expenses by HRK 645 million, and grants by HRK 1.2 billion, including a HRK 125 million cut for railways and a HRK 695 million cut for agriculture.

However, she reiterated that 87 per cent of the budget was predetermined for salaries, pensions, and benefits.

The 2010 budget takes care of social fairness and the protection of the most vulnerable categories of the population, said Kosor.

She explained that expenditure for pensions would go up HRK 582 million to 34.6 billion, for childbirth allowances by HRK 110 million to 2.1 billion, for child's allowances by HRK 15 million to 1.8 billion, for salaries by HRK 140 million to 22.5 billion, and for unemployment benefits by HRK 35 million.

Kosor said the expenditures included higher costs required for adjustment to European Union standards, such as HRK 2 billion for various related programmes and HRK 432 million for the co-financing of projects from the pre-accession funds. She added expenditures also envisaged a HRK 1 billion increase for interest rates to a total HRK 6.3 billion.

Kosor called for monitoring costs next year and for additional cuts wherever possible, and announced the continuation of structural reforms.

A model for state and public administration reform is expected by the end of the year, Kosor said, announcing a re-examination of agencies and funds, work on criteria for a possible reorganisation of local units, measures aimed at strengthening the economy, and changes to the state grant policy.

"There is a lot of difficult work ahead. There will be more difficult decisions," she said.

Aside from the draft budget, the government forwarded to parliament budget projections for the next two years and a law on the execution of the budget, which would authorise the government to borrow HRK 28.5 billion in 2010 in order to finance due liabilities and the deficit.

 

(HINA)

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