The Parliamentary Finance Committee today supported the proposal for the state budget for 2010, despite opposition from the opposition, which is convinced that the government shows no intention of implementing necessary reforms, that the planned revenues are unrealistic, and that the budget will undergo a rebalancing before summer.
"2009 was financially lost, nothing was done, and the new budget is discouraging," assessed Gordan Maras (SDP), who claims that the planned budget does not lead to an exit from the crisis, but to stagnation, and that the planned general government deficit of 2.7 percent of GDP will go exclusively to consumption. Maras finds the government's explanation that about 90 percent of budget expenditures are predetermined unacceptable, arguing that in a crisis, one should not speak of predetermined costs and that it is the government's responsibility to find room for expenditure reduction. His party colleague Dragica Zgrebec asked what the effects of anti-recession measures are. She also reminded that the government had announced it would reduce illiquidity, but that "illiquidity has exploded, which will certainly reflect on the budget."
Zgrebec is also convinced that the guarantees that will come due will have to be paid by the state from the budget, and it is unclear which items will change then. "This budget is full of question marks," warned Zgrebec. Although she considers the projections for 2010 unrealistic, Zlatko Koračević (HNS) is more concerned about the projections for 2011 and 2012, which, he claims, show that the government does not plan to implement necessary reforms in the coming years. "We can only exit the crisis through the rationalization of the public sector, which is not foreseen in the projections for 2011 and 2012," warned Koračević. He also pointed out that due to poor administrative and fiscal capacities in local government and agriculture, more money would be paid into the EU treasury than would be drawn from the funds.
Nada Čavlović Smiljanec (SDP) fears that the planned reduction in subsidies in agriculture will mean activating a legal provision under which small businesses will lose their right to incentives. HDZ members of the Committee rejected interpretations that the increase in the competitiveness of the economy has been abandoned. "The budget is realistic, it takes into account the situation in Croatia, Europe, and the world, and 10.5 percent more money is allocated for the development of competitiveness," said Nevenka Majdenić (HDZ). The Committee Chairman Goran Marić (HDZ) believes that the government should be cautious when it comes to introducing new excise taxes, as they could produce the opposite effect.
