Monday, 18 November 2019

93rd Sitting of the Committee on Finance, State Budget and Control of Public Spending

At the sitting held on 18 November, the members of the Committee on Finance, State Budget and Control of Public Spending considered the Republic of Serbia 2020 Budget Bill, with its accompanying Proposal of the Decision to grant consent to the Republic Pension and Disability Insurance Fund 2020 Financial Plan, Proposal of the Decision to grant consent to the Republic Health Insurance Fund 2020 Financial Plan, Proposal of the Decision to grant consent to the National Employment Service 2020 Financial Plan and the Proposal of the Decision to grant consent to the Fund for Social Insurance of Military Insured 2020 Financial Plan, in principle.


The sitting was attended by representative of the submitter Minister of Finance Sinisa Mali and associates, the President of the Fiscal Council Pavle Petrovic and members Vladimir Vukcevic and Nikola Altiparmakov, as well as rapporteur of the Environmental Protection Committee Prof. Dr Snezana Bogosavljevic Boskovic.

Committee Chairperson Dr Aleksandra Tomic reminded the Committee members that the Fiscal Council had submitted an assessment of the 2020 Budget Bill and the Parliamentary Budget Office had submitted its analysis. Tomic also informed the Committee members that the Culture and Information Committee, Agriculture, Forestry and Water Management Committee, Environmental Protection Committee, Committee on the Economy, Regional Development, Trade, Tourism and Energy, Committee on Labour, Social Issues, Social Inclusion and Poverty Reduction and the Health and Family Committee had submitted their proposals that the Committee on Finance, State Budget and Control of Public Spending accept, in principle, the sections of the 2020 Budget Bill within their purview.

The Committee ruled to double the time allotted for debate in principle, after which Minister of Finance Sinisa Mali presented the Bill. He said he was pleased that the 2020 Budget Bill got into parliamentary procedure on time and as planned. The intention in drafting the Bill was to increase the overall living standards and accelerate the country’s economic growth. Speaking about the increase in living standards, Mali pointed out that it was characterized by an increase in wages in the amount of 8 to 15%, an increase in pensions according to the Swiss model of 5.4% together with the one-time assistance already paid and a 3,000 RSD increase in minimum pay. Mali pointed out that the acceleration of economic growth is reflected in the 260 billion RSD public investments which include the construction of the Morava corridor and other roads, as well as railway infrastructure, then unburdening of the economy, which is reflected in reducing the burden on wages in order to stimulate new employment, with the cost to the state amounting to 13.1 billion RSD. Mali emphasized that today we are talking about a different timeframe than 2014, because today, the finance consolidation ends and a new investment cycle begins. The unemployment rate is 10.3%, the budget has a surfeit of over 60 billion RSD, the deficit is 0.3% at the level of the republic or 0.5% at the national level for 2020. The tendency of public debt decline has brought us to 51% today, with a projected reduction to 50.3% in 2020. The growth rate will go above 3.5% this year, which gives us the opportunity to plan for it to grow to 4% in 2020, and there is also growth in direct foreign investment amounting to 5.8 billion USD for 107 projects, said Mali. He also said that the average salary in Serbia in December 2019 will be over 500 euros, as was promised, and the average salary will continue to grow over the coming year.

The President of the Fiscal Council Pavle Petrovic gave an assessment of the 2020 Budget Bill saying that the main drawback of the Bill is the excessive growth in public sector wages, which undermines future economic growth and the citizens’ living standards. He stated that economic growth is still around 3 or 3.5%, which is just the very beginning and should be about 5%. In addition, Petrovic said that the funds in the budget are well-distributed, especially in terms of deficit level, falling public debt, carefully planned revenues and expenditure, which he estimated will be realized and will lead to a surfeit which should be used for investments, especially in utilities. Criticizing the 2020 Budget Bill, Petrovic stated that the continuation of the employment ban, despite the recommendation that this practice be discontinued is a serious problem, as are the growing expenditures for penalties.

Environmental Protection Committee rapporteur Prof. Dr Snezana Bogosavljevic Boskovic presented the Committee’s Report on Section 25 of the 2020 Budget Bill with the proposal that the Committee on Finance, State Budget and Control of Public Spending accept it in principle.

Following a lengthy debate the Committee members accepted the Bill in principle.

The Committee members went on to adopt a Decision on the establishment of a Working Group to assess the eligibility of candidates in the nomination process for the election of President and four members of the Council of the Commission for State Aid Control. The Committee Chairperson informed the members that the National Assembly Speaker had on 23 October issued a public call for the election of President and four members of the Council of the Commission for State Aid Control, with a 20-day application deadline, therefore the Committee Chairperson proposed the establishment of a three-member Working Group to review the applications and documentation submitted. The Committee decided that the Working Group be chaired by Committee member Dr Milorad Mijatovic, with Goran Kovacevic and Milan Lapcevic as members.

The sitting was chaired by Committee Chairperson Dr Aleksandra Tomic and attended by the following Committee members and deputy members: Zoran Bojanic, Olivera Pesic, Dr Milorad Mijatovic, Srbislav Filipovic, Goran Kovacevic, Sonja Vlahovic, Momo Colakovic, Vojislav Vujic, Zoltan Pek, Milorad Mircic, Aleksandar Stevanovic, Zoran Despotovic, Veroljub Arsic and Milan Lapcevic, as well as MP Djordje Vukadinovic who does not belong to any parliamentary groups.


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