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Hajdaš Dončić: I would tax the excess profits of the energy, logistics, and banking sectors

Siniša Hajdaš Dončić
Siniša Hajdaš Dončić / Image by: foto Ratko Mavar

Anyone who follows events on the domestic political scene with one eye and half an ear was not surprised by the news that Siniša Hajdaš Dončić won the race for the president of the Social Democratic Party (SDP). By profession, he is an economist, even holding the title of assistant professor, more precisely a doctor of economic sciences, and he has only worked in the real sector for one year, and that was in the Regeneration company in Zabok. After that, he was the head of the department for economy, agriculture, tourism, and communal activities in Krapina-Zagorje County for four years, and he also worked as the director of the Zagorje Development Agency until he became the county prefect.

However, he occasionally teaches microeconomics and macroeconomics at various business schools and at Libertas University. Since being elected president, Hajdaš Dončić has made several statements in which he has reiterated that he sees the SDP as a party of progressive left, so we first asked him what that term means to him, especially since it is usually associated with policies of higher taxes. But for him, he says, that term means support for workers, unions, as well as small and medium-sized entrepreneurs, who are also workers.

– This means that the SDP is open to all those who work and who work independently. I mean a large part of those who are not part of large corporations and who do not have the support of large departments from accounting to marketing, and who are left to fend for themselves in Croatia because they do not have the support of institutions, which generally do not function and are not equal to everyone. For me, progressive left, besides supporting workers, also means green policies in the economy. Furthermore, the progressive left advocates for the introduction of taxes on the excess profits of multinational companies that, thanks to their monopolistic position, achieve exceptional extra profits. However, these multinational companies can reduce such taxation themselves if they actively contribute to local communities, either through increased wages or donations for culture, sports communities, or, for example, for firefighters.

This means everything that is already being done based on ESG.

– Let’s say that it is all part of ESG, we can call it that too. Furthermore, for me, progressive left means strengthening institutions, primarily those that deal with the protection of market competition, which would, for example, require foreign retail chains that behave completely differently in their home countries to behave equally in Croatia. For that, a change in the entire way of thinking in Croatia is needed and more discussions about development, and less about growth. Development is a much broader component than economic growth. Growth is based on GDP rates, the growth of employment, and the growth of unemployment. I am not interested in that; I am interested in the concept of development, which is broader.

When we talk about excess profits, would you tax all or only certain sectors?

– Here, I primarily mean the energy sector, supply chains, and the banking sector. It is absolutely unacceptable for the banking sector to extract two and a half billion euros from the Croatian financial circulatory system in the form of dividends in a year and a half and hand that money over to parent companies in other countries. This is Croatian money that could have been used for higher pensions and for different social transfers, but there is also money for subsidies for small and medium-sized enterprises.

The government did try to introduce a tax on excess profits for banks, but there were obviously good arguments from the banking sector that ultimately led to the abandonment of that intention. How would you deal with ‘argumentation’?

– Very simply. A large amount of savings has been accumulated in Croatia, either in real estate or in bank accounts, and my progressive left policy is based on the idea that excess wealth should not be passively stored in real estate but should be actively returned to the Croatian financial system. The government is doing something timidly by issuing domestic bonds. As a state, we have the opportunity to issue more domestic bonds to finance or refinance specific state needs.

O.K., but such a radical proposal for a tax on excess profits was not supported even by the European Parliament, and in the EU, only energy companies are extra taxed.

– I am aware that Croatia must be present at the table with other EU member states, but I also believe that Croatia can and should have its own fiscal policy. Fiscal policy is not prescribed, unlike monetary policy, and that is why I believe that the state must be strong, or stronger than multinational companies.

How would the SDP, if in power, tax salaries, how much would an IT freelancer pay in taxes, and how much would an IT employee in a bank pay, who will be the party’s candidate for prime minister, and what political influencers has the SDP opened its doors to, read in the printed or digital edition of the Lider weekly.

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