In the first four months of this year, budget revenues fell short by 1.164 billion kuna, which, combined with an expenditure increase of 1.7 percent, pushed the budget deficit during this period to 5.6 billion kuna.
The Ministry of Finance emphasizes that the bulk of the deficit was realized in the first three months when revenues are traditionally weaker and expenditures higher, partly because more than half of agricultural subsidies are paid out in February and March. Overall, revenues fell short by 3.2 percent, with the largest shortfall coming from corporate tax (980 million kuna less), while on the other hand, excise duties increased by a significant 39 percent, due to INA contributing about 800 million kuna more to the budget this year compared to the same period last year. As usual, the most was allocated for pensions, healthcare, and salaries, for which 190 million kuna more was paid. In the first four months, a total of 11.7 billion kuna was allocated from the budget for pensions, but only 6.2 billion kuna was secured from contributions. If the contribution payments continue to decline at the same rate (5.5 percent over four months), by the end of the year, there could be a shortfall of as much as 20 billion kuna for pension payments. However, the Ministry of Finance estimates that due to a decrease in unemployment, the situation could improve, and the shortfall will be ‘only’ around 16 or 17 billion kuna.
Healthcare is not faring much better. A total of 6.6 billion kuna was allocated in four months, but contributions collected amounted to 5.7 billion kuna. Although the budget deficit is not currently decreasing, tax changes, as we learn, will further empty the state treasury. Namely, while the abolition of tax reliefs will leave around 500 million kuna in the budget, which would be the amount of refunds based on those reliefs (payments for health, life, pension insurance, housing needs…), changes in tax brackets and rates should leave citizens with around 1.5 billion kuna. The Ministry claims that there is no need to lament over the reliefs, as, for example, supplementary and primary health insurance was used as a relief by 223 thousand citizens who received about 40 million kuna in overpaid taxes back on that basis. Housing reliefs were used by 106 thousand people with a refund of 210 million kuna. As evidence that the bulk of the budget is dictated by the Ministry, they draw data on expenditure growth from 2004 to 2009. The data shows that expenditures for pensions increased by 35 percent over five years, for healthcare by as much as 59 percent, and unemployment benefits by nearly 44 percent, but this year, compared to last year, due to layoffs, they are likely to double. The Ministry continues to stand by its promise that by July 1, the payment period will be shortened to 60 days, noting that they still insist that HUP publish a list of companies that owe the most and for the longest time. (Gordana Gelenčer)
