The Committee members accepted the Committee Chairperson’s proposal to conduct a joint debate on all the items on the agenda, pursuant to Article 76 of the National Assembly Rules of Procedure.

The bills and decision proposals were presented by Minister of Finance Dusan Vujovic, representative of the submitter.

Minister Vujovic said that public finance has improved in the past two years and, responding to the criticism that the Republic of Serbia 2017 Budget Bill was late being submitted into assembly procedure, added that the dynamics of the Budget System Law has not been maintained for years. This year the reasons for it resulted from the need to consult with IMF and analyse the results of the third quarter which shows a surfeit, 36% growth and 1.6% deflator. Speaking of the objections to Article 3 of the Republic of Serbia 2017 Budget Bill – public debt, Vujovic said that for the first time this article covers all project loans in the amount of 43.5 billion RSD. Next year’s deficit is planned at 1.7% GDP, 1.6% of which goes to project loans. He also added that the planned deficit is the lowest in history and smallest from 2001 to date. The planned economic growth for next year is 3%, 1.6% inflation and 1.7% targeted deficit. The Minister opined that we have not emerged from the problems, but we have achieved more than we planned. The public debt will be 0.5% lower in 2017 i.e. it will go down from 73.5 to 72.8% GDP, with the tendency to reduce the proportion of USD in the public debt, stated Vujovic.

Speaking of the Fiscal Council’s assessment of the Republic of Serbia 2017 Budget Bill, Fiscal Council President Pavle Petrovic declared the planned deficit of 1.7% at the level of the state and 1.6% for the Republic a particular success because it enables the reversal of the loan trend compared to GDP and decrease of one percentile point in the next year, which is crucial for the recuperation of public finance. That being said, next year’s public debt remains high which presents a danger because a possible recession could lead to crisis and a new increase, said Petrovic. Petrovic commended the increased income which would lead to a drop in deficit and economic growth. Speaking of the deficit structure Petrovic said that more than half of it goes to payment of guarantees for the public enterprises’ loans for the period 2010-2014. The risk this mechanism is activated in 2017 is present because enterprises in restructuring do not pay their debts to public enterprises and there is a danger that these debts be transposed into public debt which can again create a problem in the coming years, opined Petrovic. The Fiscal Council criticised the public administration reform meaning personnel structure optimisation and extension of the existing law banning employment to the end of 2017, which indicates that the reform problem would not be addressed next year. Another objection is that there is no listing of penalties, fines and damages amounting to 100 million EUR and no breakdown analysis per budget beneficiary so that the data could be compared with previous years’. The Fiscal Council did commend the budget’s transparency, especially concerning subsidies, inclusion of infrastructural projects, which is a significant methodological improvement, and increase of public investment as key for economic growth.

Following a lengthy debate the Committee members accepted, by majority vote, the Proposal of the Decision to grant consent to the Decision amending and modifying the Republic Pension and Disability Insurance Fund 2016 Financial Plan, Proposal of the Decision to grant consent to the Decision modifying the Republic Health Insurance Fund 2016 Financial Plan, Proposal of the Decision to grant consent to the Decision amending and modifying the Fund for Social Insurance of Military Insured 2016 Financial Plan, and the Proposal of the Decision to grant consent to the Decision modifying the National Employment Service 2016 Financial Plan.

By majority vote the Committee members accepted the Bill amending and modifying the Budget System Law, in principle.

By majority vote the Committee members also submitted an amendment to Article 8 of the Republic of Serbia 2017 Budget Bill, to decrease the funds allocated to the National Assembly, which the representative of the submitter accepted at the sitting.

the Committee members accepted, by majority vote, the Republic of Serbia 2017 Budget Bill with its accompanying Proposal of the Decision to grant consent to the Republic Pension and Disability Insurance Fund 2017 Financial Plan, Proposal of the Decision to grant consent to the Republic Health Insurance Fund 2017 Financial Plan, Proposal of the Decision to grant consent to the National Employment Service 2017 Financial Plan and the Proposal of the Decision to grant consent to the Fund for Social Insurance of Military Insured 2017 Financial Plan.

The sitting was chaired by Committee Chairperson Dr Aleksandra Tomic.

The sitting was attended by the following Committee members and deputy members: Olivera Pesic, Radmilo Kostic, Vojislav Vujic, Dusan Bajatovic, Goran Kovacevic, Srbislav Filipovic, Dr Milorad Mijatovic, Zoran Bojanic, Snezana B. Petrovic, Zoran Krasic, Veroljub Arsic, Milorad Mircic, Goran Ciric and Sasa Radulovic.