By: Ana Horvat (Nova24TV.si)
After several warnings from the Fiscal Council regarding the government’s excessive spending, Finance Minister Klemen Boštjančič has now assured that the government has followed fiscal rules, which will be in effect again next year. The government has prepared a budget change for 2024 and 2025 with the aim of reducing expenses through certain financial cuts. While the Maribor hospital has to manage the renovation on its own, non-governmental organisations will certainly not feel any shortage – they will receive more.
The total expenses for the coming year are being reduced from 15.5 to 15.23 billion euros, and in 2025, they are projected to amount to 15.9 billion euros. Despite their attempt at “financial stabilisation” through certain cuts, the expenditure will still be 50% higher than in 2019. Finance Minister Klemen Boštjančič stated on national television that not everyone will be satisfied with the reductions. According to the data, less funding is allocated to the Ministry of Health, while more funds are allocated to non-governmental organisations. SDS MP Franc Breznik pointed out the ministry’s semi-annual data, which revealed that Golob’s government spent more than it could afford, resulting in a budget deficit of over 400 million euros. He addressed a parliamentary question regarding this issue.
The government initiated the procedures for preparing the budget proposals for the next two years at the end of May, and the special feature this time is that they have taken fiscal rules into account. As Boštjančič stated on the show Odmevi, the expenditure ceilings for all budget users have already been determined: for 2024, in accordance with the decree on the framework for preparing budgets for all four public treasuries, they must not exceed 15.3 billion euros, and for 2025, not 15.9 billion euros. In 2024, the expenses will be approximately 300 million euros lower than planned in the budget approved by the National Assembly in November last year. Ministries will have to prepare their financial plans by August 22nd, and according to Boštjančič, while all spenders are dissatisfied on one hand, they also understand the reality of the situation.
After the session, the government published the breakdown of budgets for 2024 and 2025, but it is not directly comparable to the adopted budget for 2024 due to the inclusion of new ministries and therefore different reallocations, responsibilities, and objectives. However, certain aspects are quite clear: the health sector, an area with which the current government struggles to cope, would directly receive less. According to the approved budget, the Ministry of Health would receive 734 million euros, but the proposed budget changes allocate 542 million euros for this sector. In 2025, the ministry’s budget would further shrink to 492 million euros. The Ministry of Economy would also experience a reduction. According to the new proposal, its funds for 2024 would amount to 179 million euros, compared to the originally planned 196 million euros. The Ministry of Defence would receive less as well, with a revised budget of 1.049 billion euros instead of the previously projected 1.064 billion euros.
Less for the health sector, more for non-governmental organisations
The financial cuts will certainly not affect non-governmental organisations, as their total funding is increasing from 78.3 to 81.6 million euros. The National Assembly will also receive 1.7 million euros more than in the current budget (34.5 million euros), the Constitutional Court will receive 1.5 million euros more (7 million euros), the Court of Audit will receive half a million euros more (8.8 million euros). On the other hand, the State Electoral Commission will receive 800,000 euros less (5.1 million euros). The budget allocation for the judicial sector will remain roughly the same: the approved budget for the coming year foresees 271 million euros for courts and prosecutors, ensuring the fulfilment of their obligations and addressing outstanding debts, particularly related to judges.
The Ministry of the Interior will receive an increase of 28 million euros compared to the previously approved budget. What is positive about the budget is that it will allocate some funds to farmers, while the budget of the Ministry of Foreign Affairs will remain practically the same. The Ministry of Public Administration will receive 173 million euros, compared to the previous allocation of 135 million euros.
The Infectious Diseases Clinic in Maribor is expected to “figure it out on its own”, while more money will be allocated to Maljevec
The Ministry of Infrastructure will receive considerably less, as the minister criticised Minister of Infrastructure Alenka Bratušek and her project to establish a national airline carrier. He acknowledged that Slovenia’s air connectivity is poor but stated that this problem could be solved more effectively and cost-efficiently. The budget of the Ministry of Labour is also being reduced (from 2.1 to 1.8 billion euros), but do not be misled by this, as some activities have been transferred to the Ministry of Solidarity Future, which will have 155 million euros available next year and 272 million euros in 2025. This is all under the pretext of building non-profit housing, but we only hear words and see letters on paper. Changes were also made to the Recovery and Resilience Plan (NOO), in which funding for the project of the Ljubljana Medical Faculty remains in the plan, but the project for a new infectious diseases clinic in Maribor has been excluded, and it is expected to “fend for itself”.
Expenditures are 50 percent higher than in 2019, and the deficit in the state treasury is also significantly higher
During a press conference after the government session, Boštjančič stated that expenditures would still be high, 50 percent higher than in 2019. He said that “such a level enables addressing key development challenges while using resources rationally”, which raises many questions considering that more funds will be allocated to NGOs and ministries that have not proven to be useful or developmental. It should be noted that according to initial data from the Ministry of Finance, the state budget had a deficit of 413 million euros in the first half of this year. In the same period last year, the deficit was 124 million euros, although the previous period was influenced by elections, the pandemic, and the outbreak of war in Ukraine.
MP Breznik to the government: The state budget is not a bottomless pit
In relation to the large deficit and the government’s inefficient handling of taxpayers’ money, SDS MP Franc Breznik addressed the following parliamentary questions to the government:
- How does the Government of the Republic of Slovenia comment on the high deficit of the state budget in the first half of this year?
- What measures will the Government of the Republic of Slovenia take to reduce the deficit?
- Is the Government of the Republic of Slovenia aware that the state budget is not a bottomless pit and that it will have to prioritise its actions?
- How will the Government of the Republic of Slovenia finance the change in the public sector employees’ salary system?
- How will the Government of the Republic of Slovenia finance the announced healthcare reform and other planned reforms?
What priorities will the Government of the Republic of Slovenia set and what measures will it actually implement in light of the high deficit?