Tripartite Wants Further Discussions about 2017 Budget Draft

Labour, Social Affairs and the Family Minister Jan Richter (Stock photo by TASR)

Bratislava, October 4 (TASR) – The draft of the state budget for 2017 that was negotiated by the Slovak Economic and Social Council at an extraordinary session in Bratislava on Tuesday was criticised by the social partners on the same day.

Social partners said they had too little time to properly analyse the draft. Unionists are saying there’s a lack of reserve for covering the hikes in salaries of employees in the state and public administrations, while employers are criticising that despite the period of economic growth, the Government didn’t succeed in decreasing the public finance deficit sufficiently.

According to Labour, Social Affairs and the Family Minister Jan Richter (Smer-SD), the draft is directed towards achievement of a balanced budget, while respecting the law on debt brake. “Obviously, every investment asks for new jobs … but right now it’s important to respect our commitments we’ve given at home and at the EU level,” said Richter after the tripartite session.

Social partners received the budget draft on Monday (October 3) and they want to discuss it further, although the Cabinet is set to talk about the draft already on Wednesday (October 5). It should be sent to Parliament by October 15.

The Association of Employers Unions (AZZZ) positively evaluated the Government’s activities in terms of improved tax collection and measures aimed at tackling the tax evasion. However, AZZZ vice-president Rastislav Machunka reminded that the budget draft from 2014 anticipated a deficit at 0.39 percent of the GDP in 2017, which hasn’t been achieved despite the economic growth.

“Bad times will come and if we hit a recession, there won’t be any scope for stimulation by the state. Right now, when we have an economic growth of 3 percent, there’s a scope for more intensive consolidation of public finance and for achievement of a balanced budget to create a room [for manoeuvring] in an era, when we’ll have to stimulate the economic growth,” noted Machunka.

On the other hand, unionists think that a far-fetched reduction of deficit at the expense of investments is ineffective. “We still keep seeing rather an economic growth in terms of hikes in salaries as well as in investments in the road, rail and air infrastructures. It’s a whole-European trend not to sustain the deficit at any price but rather to give more to impulses for development,” said Trade Union Confederation (KOZ) president Jozef Kollar.

The Slovak Towns and Villages Association (ZMOS) also made comments about development impetuses in areas of tourism, construction of infrastructure and of flats. ZMOS chairman Jozef Dvonc suggested to look for the finance in EU funds.

According to the first budget draft released by the Finance Ministry in August, the cash deficit of the state budget is supposed to reach €2.426 billion in 2017. Total revenues of the budget should reach €14.399 billion, while total costs €16.825 billion.

The public administration deficit is expected to be gradually reduced in the next years – to 1.29 percent in 2017 and 0.44 percent in 2018, with the budget finally reaching a surplus of 0.16 percent in 2019.