TAX COUNCIL ON BUDGET PROPOSAL: a lot of weapons, little infrastructure, education and health | Economy

29 November 2018 11:02 |

Serbia's draft budget for 2019 was considered realistic, but it was warned that "underdeveloped capital investments undermine the basis for higher growth and higher standards in the future"

The cash register plan is essentially balanced, the revenues and costs are well planned and the deficit, below 29 billion dinars at the level of the general government, is well chosen. This suggests that the Serbian public debt linked to the current 54% of gross domestic product will fall slightly by more than 51%. Thus, the Budget Council estimates the draft Serbian budget for 2019. However, they have objections and it is essential that they are not sufficiently invested in the road and rail infrastructure, the protection of the environment, education and health. They say, they say, that they undermine the basis of future economic growth and hence the standard of living of citizens.

On paper, the budget provides for higher investments, 165 billion against 127 billion this year. The Tax Council, however, explains that they are not going where they need to go. Instead of infrastructure, it is used for arming and equipment of the army and police (46 billion dinars are spent for these purposes).

READ MORE – Tax Tip: Deficit is Responsible, Public Sector Wages Unjustly Increase

– Serbia has registered a total economic growth of 10% in the last five years and the countries of Central and Eastern Europe during the same period recorded a growth of 20% – said Pavle Petrovic, president of Budget Council. – The problem of growth is of a structural nature. It is important for the government to deal with that. We showed that it was possible to invest at least 200 million euros in infrastructure and ecology. It was also possible to relieve the economy. The government has decided to invest in weapons and higher wages in public scouting. Wages were again increased by sectors, from 7 to 12%, and no payroll class was introduced. It continues with a harmful employment ban.

Salaries in the public sector will increase by an average of nine percent. This is almost double compared to the economy. And this happens two years in a row. And this year warns the Budget Council, the public sector has "strengthened" nine and the private sector five percent.

The Tax Council welcomes the announced phasing out of savings on employee wages in state-owned companies, by 5% to come and by 5% by 2020. In the case of all listed companies, with the exception of "Elektroprivreda Srbije", the main reason is that the financial statements of this company show that they have not even reduced their salaries since 2015.

READ MORE – Mali: National cash register plans to expand

STIHIJSKI ODLAZE

TAX COUNCIL warns that EPS has not systematized for years. Employees leave the company voluntarily without the right plan.

– Maybe no one in the state knows exactly how many EPS employees are. This number varies between 30,000 and 35,000 people – said Danko Brčerević, chief economist of the Budget Council. – Compared to similar systems in other countries, it seems to have a surplus.