The Parliamentary Finance Committee and the state budget on Tuesday supported, with three abstentions from SDP members, the rebalance of the state budget which increases revenues in 2016 by 1.5 billion kuna, while expenditures are reduced by 684.6 million kuna.
“Good economic indicators in the second half of the year, and considering the growth of 2.7 percent in the first half of the year, lead to an increase in the revenue side of the budget by 1.5 billion kuna,” said State Secretary of the Ministry of Finance Željko Tufekčić.
According to him, the largest contribution to this increase came from income tax revenues, amounting to 1.2 billion kuna as a result of better business performance of companies during 2015. Revenues from excise duties also significantly increased, by 725 million kuna, as well as revenues from property, based on increased payments from state-owned public companies, primarily from HEP in the amount of about 600 million kuna, reports N1.
On the expenditure side, the largest savings, he notes, were achieved in the categories of financial expenditures (interest), payments to citizens and households, assistance, and capital expenditures.
Branko Grčić (SDP) stated that the increase in income from corporate tax in the amount of 1.2 billion kuna is proof that ‘his’ government has done a good job and that the award received yesterday by Finance Minister Zdravko Marić for GDP growth should be shared with Boris Lalovac, the former finance minister in the SDP government.
Grčić’s party colleague Gordan Maras called the rebalance a “budget renaissance.” “We are witnessing a budget renaissance, or a reduction in the deficit,” Maras said, adding that the relief for entrepreneurs in the tax reform could be even greater, urging the government to increase subsidies to entrepreneurs which have been realized this year at 50 percent of the planned amount.
Grčić also stated that in the rebalance, the most glaring issue is the reduction of expenditures for pension indexation.
He also asked whether the reason for the higher revenues from excise duties, by 315 million kuna, is that citizens smoked more cigarettes due to the government crisis, i.e., the collapse of the former government and disagreements between Most and HDZ.
Anton Kliman (HDZ) responded that part of the subsidies to entrepreneurs could not even be utilized due to the high criteria set in the EU fund tenders.
Grčić also mentioned that in the rebalance, the most glaring issue is the reduction of expenditures for pension indexation, which have already fallen below 40 percent of the average salary, and proposed that in the future, attention should be paid to overcoming this gap through additional criteria for pension adjustments.
With the proposed rebalance, total budget revenues would amount to 116.37 billion kuna, which is 1.45 billion kuna or 1.3 percent more than originally planned, while total expenditures are reduced by 684.6 million kuna, to 121.72 billion kuna. Thus, the deficit of the state budget would amount to 5.35 billion kuna or 1.6 percent of GDP (according to national methodology), which is a reduction of 2.1 billion kuna or 0.6 percentage points of GDP compared to the original plan.
