By: C. R., STA
If the Intervention Measures Act is approved, on which voters will decide in the referendum on 6 December, there will be no restrictions on public services or any dismantling of the welfare state, according to Finance Minister Andrej Šircelj. The Ministry of Finance has estimated the public-finance revenue shortfall resulting from the measures contained in the law at just under €650 million, using what it describes as a dynamic assessment method.
Šircelj believes that voters will make a rational decision at the legislative referendum in December and approve the Act on Intervention Measures for the Development of Slovenia, whose effects, he argues, will be reflected in higher incomes, better business conditions, and increased economic competitiveness. At the same time, he maintains that even if the law is approved, all public finances will remain compliant with fiscal rules.
According to Šircelj, the adoption of the Intervention Measures Act would not alter the governing coalition’s commitment to maintaining sustainable, stable, and secure public finances as the foundation for long-term prosperity. He made these remarks at a press conference today.
The Ministry of Finance has prepared updated calculations of the law’s public-finance effects based on the latest available data and analyses from domestic and international institutions. The ministry used a dynamic model, meaning that it also considered the expected positive effects of the law on the behaviour of businesses and consumers.
Under this approach, the annual fiscal impact is estimated at €647 million, or slightly more than 0.8 percent of GDP, primarily in the form of reduced public revenue. According to Šircelj, this estimate is close to the assessment made by the International Monetary Fund regarding the law’s effects.
A static estimate of the law’s effects puts the impact at €848 million, which is lower than the estimate of the Fiscal Council, which projected a cost of €1.2 billion, or around 1.5 percent of GDP, for the following year. Šircelj attributed the difference largely to differing underlying data and assumptions, noting that the ministry relied on the most recent figures and forecasts. He also suggested that the Fiscal Council may have assumed a longer time frame before businesses and consumers adjusted their behaviour.
According to ministry estimates, the public-finance deficit for 2027 would exceed 3.3 percent of GDP without additional measures. To bring it below the three-percent threshold and down to 2.9 percent of GDP, measures worth approximately €300 million to €350 million would be required.
The law would affect not only the state budget but also the pension and healthcare funds. According to Šircelj, the government plans to cover the entire projected shortfall in the pension fund, estimated at €369 million, through increased transfers from the state budget. The budget would also cover the expected shortfall in the healthcare fund.
Regarding the measures needed if the law is implemented, Šircelj explained that some would require legislative changes, while many would not. These would include optimisation of operations within the public sector; improving and harmonising administrative records used for social transfers; postponing certain investments included in multi-year development programmes. He specifically mentioned healthcare investments that, according to government assessments, could be postponed for several years.
State Secretary Kristina Šteblaj added that most of the measures would consist of relatively soft and quickly implemented adjustments that would generally not require legislative changes but could nevertheless produce significant public-finance savings. She also referred to measures aimed at improving data-sharing between public records, reducing fiscal costs associated with sick leave, and implementing planned reforms in the area of long-term care.
Measures that would need to be reflected directly in the state budget would require a budget revision during the following year. According to the ministry, this would be prepared after the spring economic forecast by the Institute of Macroeconomic Analysis and Development, with the expectation that the law’s implementation would improve economic prospects.
Šircelj therefore insisted that, even if the law is approved pensions will continue to be paid in full and on time and healthcare services will not be reduced. Therefore, according to him, there is no danger of the collapse of the welfare state or public services, despite warnings from trade-union groups supporting the referendum initiative. He added that we will optimise and improve certain things, which is only positive.
Overall, Šircelj described the law as highly beneficial, arguing that it represents a shift toward placing greater value on entrepreneurship and recognising higher-paid employees for creating higher added value and productivity. He also expects more investment in higher-value-added activities and, at minimum, a reduction in the relocation of certain business activities abroad.
If the law is not adopted, however, Šircelj noted that the coalition agreement still includes numerous measures aimed at tax relief and improving the business environment. He also welcomed what he described as near-consensus in the National Assembly regarding personal income tax relief, citing a legislative proposal from the Freedom Movement.
For public finances, failure to adopt the Intervention Measures Act would simply mean that the budget documents for 2027 and 2028 remain unchanged, since those budgets do not currently incorporate the law’s effects.
