Economic Program of the Party with Name and Surname, Focus and Smart

We present the economic part of the electoral program of the Party with Name and Surname, Focus and Smart, which was presented last week, advocating for 'relieved, modern, and green economy'. Here is what they say:

It is known that tax and regulatory burdens on the economy in the Republic of Croatia are a significant limiting factor that undermines competitiveness and has a serious negative impact on the overall quality of life. Key areas where greater changes are needed to accelerate the development of the Croatian economy are:

• Modern economy – Economic development should be based on economic branches that create high added value. High-tech industries certainly occupy the top position among activities that ensure quality, accelerated, and sustainable economic growth. The competitiveness of high-tech companies needs to be encouraged by creating a favorable business environment and a set of incentive measures for investment in research and development.
• Reduction of burdens – As the most important measure, we highlight the plan to reduce fiscal and parafiscal burdens. These burdens are higher by 5 percentage points of GDP, or about 20 billion kuna, than in other EU member states of similar levels of development.

Tax relief will be implemented by applying two basic principles: 1. ensuring tax obligations for taxpayers are the same as those of their competitors in the EU common market, 2. tax liability arises when the taxpayer receives income (when the worker receives a salary, when the company collects receivables, when the entrepreneur distributes profit).

Along with the restructuring of the public sector and the reduction of budget expenditures, we will implement additional tax relief that will make Croatia even more attractive for investment and business. With an increase in the non-taxable base, we will introduce a uniform rate of 10%  income tax. Likewise, with the aim of attracting and encouraging private investment, the corporate income tax would be reduced to 10% regardless of the income level. In this way, net salaries and employment will increase, and the economy will be stimulated. Such favorable income tax creates conditions for the opening of completely new jobs with high salaries and can serve as a mechanism for the return of expatriated professionals and the attraction of new ones. For example, if 50,000 highly qualified jobs are opened with an average gross salary of 30,000 kuna (net around 15,000 kuna), this would close the gap in the healthcare budget of 3 billion kuna annually through contributions for health insurance. Additionally, another 2.7 billion kuna would be paid into the first pillar of the pension system, reducing the need to use other tax revenues for pension payments by that amount. Furthermore, increased demand would raise VAT revenues and other types of budget revenues. These measures are particularly important at a time when a large number of workers in the global economy work from remote locations, and we could attract them to come work in Croatia, bringing their salaries here and paying taxes and contributions. This creates additional value from which all Croatian citizens benefit. The proposed tax policy implies significant decentralization and the lowering of tax revenues to the regions where the tax revenue was generated. In this way, we strengthen regions and cities, enabling them to have a better mechanism for planning and managing their own development and competitiveness.

We will significantly reduce parafiscal burdens, both in financial terms and in their number and simplification of procedures, starting with the abolition of mandatory membership fees in professional associations, up to the abolition of mandatory membership fees in umbrella economic associations, such as the Croatian Chamber of Commerce, Croatian Chamber of Trades and Crafts, and similar organizations. This step would first significantly relieve the economy, but also strengthen the scenario in which associations that truly bring added value to their members have an equal opportunity to position themselves in the public life of the Republic of Croatia.

• Regulatory relief – By abolishing unnecessary administrative processes, investments would be significantly accelerated and efficiency raised. Additionally, there is room for progress in two directions – reducing costs for citizens and businesses and eliminating unnecessary processes that hinder investments and waste resources unnecessarily. The elimination of unnecessary administration will reduce the possibility of corruption, as bureaucrats in ministries and local administration will no longer be able to extort entrepreneurs and citizens.
• Green economy –  Economic growth must not be at the expense of environmental protection and the natural wealth of the Republic of Croatia. The energy needed for the economy must be provided from renewable energy sources to the greatest extent possible, but not by directly copying Western European concepts that are not directly acceptable due to the level of development of our economy, as well as other factors such as tradition, geographically conditioned availability of renewable energy sources, the development of our own renewable energy technologies, and so on. Smart management of energy systems can achieve additional savings. The transition to a circular economy needs to be carried out at a pace that is realistic for our level of economic development, when it will actually bring additional acceleration of economic activities, rather than slowing them down due to increased basic business costs. It is certainly necessary to stimulate the use of cleaner forms of transport, such as railways in suburban areas and public transport in urban traffic. By encouraging investment in renewable energy sources, we will favor those technologies and projects that achieve additional positive effects on increasing the competitiveness of agriculture and industrial production.
• Fight against climate change – In addition to a gradual and sustainable transformation towards the production of clean energy, it is also necessary to implement measures that will reduce risk and increase resilience to climate change. Problems need to be perceived in time so that solutions can be found before damage occurs, such as raising embankments on the coast in response to rising sea levels. Implementing these measures is often an interdisciplinary task, where solving one problem, such as ensuring drinking water, must not open up a whole range of other problems, from agriculture, through transport to energy. By comprehensively addressing the problem, and planning and building multifunctional systems, such as the Sava Program, it is possible to solve the problem of flood exposure, lowering groundwater levels, while energy as a source of renewable energy is actually part of the solution, not the problem, because, for example, if we want to retain water in an area during low water regimes, we can reduce the cost of building dams by incorporating energy into them, and then for one-fifth of the price, we can also make those same dams into bridges that will enhance traffic connectivity. When we add the synergistic effects that such a multifunctional solution has on other areas, such as agriculture and tourism, we then obtain high added value for the invested money. The Sava Program is an excellent example of a multifunctional project that, in addition to economic benefits, significantly raises the quality of life and ultimately brings Zagreb to the banks of the Sava, all of which can be realized with significant use of domestic knowledge and intelligence, which in the next step can be a business opportunity for knowledge export.

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