Budget bills, closer to endorsement
The Parliament of Romania has convened in a joint session and started debates on the state budget and social security budget bills
Mihai Pelin, 18.12.2017, 13:16
The draft state budget and social security budget laws for next year have entered the parliamentary debate stage, after the specialised budget and finances committees in the Senate and Chamber of Deputies passed them last week. The state budget bill submitted by the Government was slightly changed in the committee, with the most important amendment concerning the transfer of nearly 1 billion euros to local budgets. The amendment, tabled by the Democratic Union of Ethnic Hungarians in Romania, stipulates an increase from 75% to 100% of the income tax quota channelled into the local budgets of administrative units. The Finance Minister Ionut Misa explains:
“What I can tell you at this point is that most administrative units will be affected, particularly smaller ones. But we must make an analysis, see the exact figure and the impact of this amendment that has been approved.”
The Finance Minister added that the amendment was designed to offset the income tax reduction from 16 to 10%. The impact of this amendment is yet to be established, but should the figure be substantial, it could push the budget deficit above the estimated limit, Ionut Misa also says.
The Liberal Senator Florin Citu, in Opposition, says the debates in the parliamentary committees were smoother than in previous years. But the Liberals accuse the Government of increasing personnel and social assistance spending, and of cutting investments in order to make up for it. Florin Citu:
“Of course we cannot back this budget structure, because it cuts down resources that should have been channelled into investments and takes them to salaries and social assistance instead. We will be reaching a 17-year peak of social assistance and salary expenditure, and record-low investment.”
The Opposition also says that the revenues on which the public budgets rely are overestimated by at least 2 billion euros, and that the breakdown by expenditure category undermines the national economy.
The 2018 state budget calculations take into account an economic growth rate of 5.5%, an average exchange rate of 4.55 leu for the euro and average monthly wages of around 565 euros. The Government expects next year’s budget deficit to account for 2.97% of the GDP and says funds have been allotted for the promised pay raises and the 10% increase in pension point value as of July 1, 2018.
Parliament is to cast the final vote on the 2 draft laws on December 21.
(Translated by A.M. Popescu)
