By: Ž. K. (Nova24tv.si)
The latest report from the Fiscal Council contains three main criticisms of the budget planning by Golob’s government. According to the budget watchdog, the government is excessively spendthrift and plans the budget non-transparently. Above all, the Fiscal Council claims that the government will have to approach the planning of the autumn documents more responsibly. Public finances were commented on for us by the vice-chairman of the Finance Committee, Rado Gladek, and the president of the National Council, Marko Lotrič.
“This year’s budget implementation once again confirms that budget planning is accompanied by numerous deficiencies. Due to these and the changed fiscal rules, which require more credible and medium-term oriented planning, it will be necessary to approach the preparation of the autumn budget documents more responsibly,” the Fiscal Council wrote in the latest Monthly Information.
That Slovenian public finances are in trouble was also highlighted by the OECD yesterday. The latest report for Slovenia states that fiscal sustainability is a key challenge for the country. “To continue promoting economic progress and resilience, accelerated fiscal consolidation is needed, which will help reduce inflation and re-establish fiscal space,” commented OECD Secretary-General Mathias Cormann in Kranj at Brdo.
We asked the vice-chairman of the parliamentary Finance Committee, SDS MP Rado Gladek, for a comment. He warns that now is the time when Slovenia should prepare for the years of “lean cows,” which the government is not doing. Moreover, Gladek warns of wrong priorities, excessive spending, and in some cases even non-transparent budget planning.
“The government leaves a part of the budget as a ‘budget reserve’ and then disposes of this budget reserve for cases such as ‘Litijska’ (HERE). In other words, these expenses are not in the budget, and then they finance things from the budget reserve that are questionable from all aspects. The OECD also warns that this is unrealistic planning. They state that we have record revenues and record employment, so the current situation is relatively favourable, and even short-term forecasts are not bad. On the other hand, they warn that now is the time to prepare for the years of ‘lean cows.’ In other words, the time for realistic budget planning. Also, with slightly lower spending in some segments, reducing public debt,” said Gladek.
When asked if he agrees with the Fiscal Council’s assertion that the government is irresponsibly planning the budget, he replies: “Absolutely. This is taxpayers’ money, and everyone expects it to be spent transparently and sensibly. But it seems that the government is trying to satisfy the appetites of certain layers of society with this money.”
Lotrič: We have serious problems here
The president of the National Council, Marko Lotrič, initially pointed out the increase in budget revenues from corporate income tax, personal income tax, and non-tax revenues. “What is concerning are the lower revenues from VAT. We should ask ourselves why this is the case. Is it perhaps due to citizens’ purchases abroad, online? This could impact the service sector, as well as lower revenues from excise duties. Most notably, I would point out the EU funds from the cohesion fund, which have practically not started to be drawn at all. We have serious problems here,” said Lotrič.
Like the Fiscal Council, he also pointed out the poorer transparency of public finances compared to the period before the COVID-19 epidemic. “It seems to me that there is no systematic approach here,” warns Lotrič. He adds that public finances are obscured by various funds, budget reserves… “All of this clouds the insight into the financial state of the country.”
“Probably everyone remembers the post-flood promises about the SRS, i.e., the Solidarity Renewal of Slovenia and the fund for the renewal of Slovenia, where clear oversight was supposed to be established, but nothing was done about it. Despite the questions from the National Council. I fear that there are quite a few such ‘funds’ and that they are not under supervision,” he said.
We also asked Lotrič whether he shares the Fiscal Council’s opinion that the government is irresponsibly planning the budget. He responded: “Even within employer organisations, we wonder how it is possible that in a few years we went from nine billion to 17 billion in budget expenditures. These are enormous numbers, and I do not know why the expenditures have increased so drastically. I fear that we will not be able to raise such an amount of money next year.”