By: Vida Kocjan
So many publicly stated falsehoods have been voiced by the current opposition, especially by the Freedom Movement and The Left, in recent weeks that we have not witnessed anything comparable in independent Slovenia’s history. They have completely lost their compass and their sense of reality, assuming they ever had one in the first place.
At present, regarding the Act on Intervention Measures for the Development of Slovenia, opponents are promoting two mutually incompatible claims. On the one hand, they warn of a billion-euro budget shortfall and argue that the government will ultimately have to take the money from ordinary people. On the other hand, they claim that ordinary citizens will gain almost nothing from the law, while only the wealthiest will benefit.
This is a clear contradiction. If less revenue flows into the state budget because VAT on basic foodstuffs and energy products is reduced (thereby lowering prices for everyone), because contributions for the self-employed, lump-sum taxpayers, and farmers are reduced, because pensioners who continue working are allowed to receive their full pension, because the long-term care contribution for pensioners is abolished, and because contributions above €7,500 are capped, then that money remains in people’s pockets. If ordinary people truly derived no benefit from these measures, there would be no budget shortfall. Conversely, if a shortfall exists because taxes and contributions are being reduced, then people must be benefiting from those reductions. Both claims cannot be true at the same time.
The most vocal critics today are the same people who blocked and overturned the income tax reform proposed by the previous government of Janez Janša. Now, from the opposition benches, they are opposing the Intervention Measures Act using similar warnings about a budget “hole” and a supposed “law for the rich.” During the previous term they halted the gradual increase of the general personal tax allowance to €7,500, which would have increased net salaries for all employees. The tax reform was halted halfway through and, as a result, an employee earning an average salary lost €2,500, while the economy lost part of its competitive advantage.
Prime Minister Janez Janša also reminded the National Assembly of the direct connection between the positive effects of the proposed development cap and a higher general personal income tax allowance, arguing that both measures reduce the tax burden on labour. According to him, the excessive taxation of work is one of the key obstacles to Slovenia’s competitiveness.
Tax expert Ivan Simič, meanwhile, stated: “Golob’s government took the most. They have lost their compass. The referendum on 6 December will show whether voters see that as well.”