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Parliament Okays 2011 Budget, Deficit to Drop to €3.81 billion (3)
Wednesday 08 December 2010 Zoom in | Print page
Bratislava, December 8 (TASR) - Parliament voted in favour of the state budget for 2011 on Wednesday, with the deficit set to drop from this year's €4.54 billion to €3.81 billion in 2011, TASR learnt on the same day.
The overall state revenues will stand at €13.15 billion, while expenditures will reach €16.96 billion in 2011.
The bill was backed by 78 of the 147 MPs present, with 69 voting against it. The vote was attended by Prime Minister Iveta Radicova and all Cabinet members.
In line with expectations, it was supported by Coalition MPs while all Opposition legislators, who saw all seven of their proposed amendments rejected, voted against it.
The legislation underwent small Coalition-induced changes that cut the originally planned deficit from €3.83 billion to €3.81 billion. This was largely due to the inclusion of tax revenues stemming from the sale of surplus emission quotas, with the amount of the extra revenue estimated at €96 million.
As well, funds to be earmarked for the Transport, Posts and Telecommunications Ministry, which is headed by Christian Democrats (KDH) chairman Jan Figel, will be cut by €8.21 million. This is due to Parliament's recent rejection of a proposal to raise the excise tax on beer that was due to four KDH MPs' abstaining from the vote. It was then announced that a ministry under KDH's remit will have to make up for the lack of state budget revenues stemming from the Parliament's voting down of the tax hike on beer.
The Labour, Social Affairs and the Family Ministry also saw its to-be-allocated funds cut down. Due to saving measures, the ministry will receive €1.7 million less than originally planned.
In turn, the President's Office and the Parliament's Office will receive an extra €300,000 and €2.3 million in 2011, respectively.
Parliamentary debate on the bill lasted nearly two days, with Opposition MPs heaping heavy criticism on the budget. According to former finance minister Jan Pociatek (Smer-SD), the budget poses a number of risks. The largest of them lies in the fact that the public-finance consolidation will be covered by people, not the Cabinet, said Pociatek.
"People will pay for the consolidation through higher taxes, they will pay eight times as much as the Government will save," he said.
Incumbent Finance Minister Ivan Miklos (SDKU-DS) said that consolidation endeavours are designed in manner ensuring that Slovak economy won't suffocate.
Miklos also repudiated Pociatek's allegations that the consolidation will be paid for primarily by people. The state will cover 60 percent, with the remainder to be chipped in by the tax increases and GDP rise, said the minister.
Meanwhile, next year's expected price increase is to be made up for by a rise in average salaries, said Miklos.
In line with a public administration budget for next three years, which the House also discussed, the overall deficit of the state administration should decrease next year to €3.4 billion from this year's €5.1 billion, with revenues reaching €23.3 billion and expenditures €26.7 billion.
The public finances deficit should be falling gradually from the 7.8 percent of GDP reported this year to 4.9 percent in 2011 and 3.8 percent in 2012. In 2013, the state deficit should be pushed to 2.9 percent, that is under the 3-percent threshold required by the EU budgetary rules.
In an attempt to cut this year's deficit of nearly 8 percent to next year's 4.9 percent, the Government has drawn up a package of consolidation measures worth €1.75 billion. The money should be ensured via saving on the side of expenditures equalling €980 million and raising revenues by €770 million.
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