What Are Budget Users Willing to Give Up?

Assuming that all social and interest groups must tighten their belts, we asked everyone what they would give up, and by how much. The answers are mostly generalized; they have already given up everything they can and believe that a time of sacrifice should come – but only for some other groups. Or, as the unions say – put concrete proposals, goals, and deadlines for sacrifice on the table.

You can read more about this topic in the new issue of Lider, which is available at kiosks. Here you can read what agencies and interest groups responded to Lider.

Hanfa: We are mindful of cost reduction
‘Hanfa is neither a user of the state budget nor has it used budget funds for its operations since its establishment. Data on our financial operations is available in our annual reports, and we note that Hanfa takes care of cost reduction and business optimization without jeopardizing the achievement of its legally mandated goals.’

AZTN: Last year we saved 6.4 percent of planned funds
‘In 2015, the agency spent 6.4 percent less funds compared to the plan,’ they report from AZTN, reminding that the agency also participates in budget revenues from fines it imposes (17.4 million kuna in the past year) and administrative fees. They have not yet received any guidelines on cutting costs from the Ministry of Finance, but in that case, AZTN will ‘support the direction of the Ministry of Finance.’ Every year, they say, they try to save by choosing cheaper suppliers and reducing material expenses and applying for European Union aid programs.

HANDA: Defining savings in accordance with state guidelines
Similar to AZTN, the Croatian Agency for Mandatory Oil Reserves will ‘define savings, i.e., the reduction of budget expenditures for 2016 based on the guidelines and limits of the Ministry of Finance in accordance with an agreement with the relevant Ministry of Economy.’

HAKOM: Reduced fees by 40 – 60 percent
‘Most of the budget of the Croatian Regulatory Agency for Network Activities comes from the area of electronic communications, specifically from revenues for managing limited resources such as radio frequencies and revenues from operators, and all savings achieved in the current year, in accordance with the Electronic Communications Act, must be transferred to the next calendar year. Since the beginning of the economic crisis, fees for the regulator’s operations, which must reflect the actual cost without generating profit, have been reduced by about 60 percent in managing the radio frequency spectrum and by almost 40 percent for other activities performed by HAKOM.’

APPRRR: Agreement with the Ministry of Agriculture
‘The budget proposal for the needs of the Agency for Payments in Agriculture, Fisheries, and Rural Development is currently being prepared and will be finalized in agreement with the Ministry of Agriculture, in whose budget APPRRR is only a part,’ was all they had to say at that agency.

TIH: Relying on volunteers
Contrary to popular belief, Transparency International Croatia relies on the work of volunteers and external collaborators because they consider it inappropriate for public authorities to finance them due to their area of operation. ‘In the past budget year, we achieved 22,000 kuna from the local budget, and this amount was directed exclusively to the launch of TIH’s student volunteer club. Funding for civil society organizations with public money should be limited, so that only costs for renting space and utilities are financed from those sources. Everything else should be directed towards project activities and private and corporate donations,’ they propose at TIH.

GONG: The state saves for the smiles of the IMF and creditors
GONG also notes that civil society organizations are generally not budget users, and therefore ‘are not in a position to give up something for a better tomorrow like ministries, institutes, agencies, local government, social welfare centers, hospitals, schools, or universities.’ Savings do not depend on such organizations but on government policy, as evidenced by the recent example of the cancellation of hot meals for volunteers in immigrant centers. ‘We leave it to your readers to assess how much more we need such and similar savings, which are implemented to ensure smiles on the faces of the IMF and credit agencies.’ GONG also notes that a large part of their activities is funded from European sources, where they are an example of success compared to public bodies (90 percent utilization of available funds and all spent in Croatia).

SSSH: Workers have already sacrificed enough
The Confederation of Autonomous Trade Unions of Croatia warns that workers in the private and public sectors have already sacrificed enough within the framework of changes to branch collective agreements, which included everything from cutting or abolishing bonuses (Christmas bonuses, Easter bonuses, severance pay, jubilee awards, etc.) to salary reductions. They also remind that they were against non-transparent privatization, such pension reform, reduction of health contributions, and demanded regulation of public administration, which is why, among other things, they reject accusations that they are not ready for sacrifices. ‘The prerequisite for any new sacrifice is to sit at the common table, discuss and determine the direction of socio-economic development, and agree on whether there is a need for sacrifices, for what reasons, and until when,’ they are clear in SSSH. They note that workers in the private and public sectors are not opposed to each other, and the continuous incitement of one against the other is inappropriate. Both sides have another side – employers – with whom they want to negotiate collectively.

HURS: No one will sign a blank waiver anymore
If a company was in trouble, if there was a lack of money, this was always discussed with the union. This is how the idea of a non-working Friday came about. Thus, unlike the public sector, everything was resolved in reality, and we have nothing left to give up. Public sector unions are stronger and more powerful, but they too have made sacrifices; they are not unreasonable, although there have been no results from those sacrifices. No one will sign a blank waiver anymore if the government does not show a clear direction, what is intended to be achieved with that waiver, and how it will affect new employment and in what timeframe. This will determine how we will approach such discussions,’ said Ozren Matijašević, president of the Croatian Association of Trade Unions.

HUB: Lower interest rates will come with lower risk
‘Croatian banks hold a smaller share of the public debt of the Republic of Croatia. In total claims of banks against the state, about 12 billion kuna consists of treasury bills – short-term securities on which the interest rate is already very low. In the remaining part, it concerns contracts (loans or bonds) that will likely be refinanced when they mature. If the government achieves successful fiscal adjustment, refinancing will be carried out at significantly lower interest rates than previously. These lower rates are only seemingly not in the interest of banks. Seemingly, because interest rates reflect risks. Refinancing at lower interest rates will reflect a reduction in risk in the case of successful fiscal adjustment. Although banks will charge less interest in that case, the risk will be lower, and that is currently the primary interest of both banks and society as a whole,’ they say from the Croatian Banking Association.

MOST: Savings on representatives and councilors
In one of the ruling parties, they believe that ‘the processes of democratization of political parties should be implemented, which is limited by the Law on Political Parties that centralizes all political power in a narrow circle of people within the party.’ In that case, the abolition or reduction of items for political parties from the budget would lead to a stronger reliance on other sources of financing, which MOST considers positive for both the state and society. When it comes to specific proposals, ‘MOST highlighted in the program proposal during negotiations the reduction of the number of parliamentary representatives and councilors at local levels of government, the reduction of the base for representative salaries, the abolition of the right of representatives to retain their representative salary for six months plus half a salary for the next six months after the end of their mandate, and the reduction of allowances for political parties represented in the legislative authority and at local levels of government,’ concludes Jasna Matulić, a member of parliament.

HOK: New crafts exempt from chamber contributions for one year
‘By the decision of the Assembly of the Croatian Chamber of Trades and Crafts, from October 1, 2015, all newly opened crafts are exempt from paying chamber contributions for the first year of operation. Thus, the Croatian Chamber of Trades and Crafts wants to further assist new craftsmen in developing their craft and getting on their feet,’ they comment on their contribution in HOK. ‘The amount of the monthly chamber contribution has been calculated since 2014 at two percent of the basic personal deduction and currently amounts to 52 kuna per month. Thus, a significant financial relief has been achieved for craftsmen. In addition, based on the decision to exempt new crafts from paying chamber contributions in the first year of operation, craftsmen will save 4.9 million kuna, which will reduce HOK’s budget based on eight thousand newly opened crafts per year.’

HGK: Reduced membership fees four times
One of the more criticized institutions has reduced its own revenues and costs and rationalized its operations for the benefit of the economy. ‘When it comes to reducing membership fees, we will remind you that the Croatian Chamber of Economy is the only institution and chamber in the country that has independently reduced membership fees four times, and in 2014 completely abolished financing from contributions. The monthly membership fee for 96 percent of companies today amounts to 42 kuna,’ they say in HGK. ‘While others talked about reforms, the Chamber implemented them,’ they emphasize in the Chamber, referring to a series of rationalization measures.

Who did not respond to what they would give up

SDP and HDZ
The Croatian Pensioners’ Party
HVIDRA
The Croatian Bishops’ Conference
HHO
NHS – Independent Croatian Trade Unions
The Croatian Agricultural Chamber