At the sitting held on 9 November, the members of the Committee on Finance, State Budget and Control of Public Spending considered, in principle, the Bill amending and modifying the Republic of Serbia 2020 Budget Law, with its accompanying Proposal of the Decision to grant consent to the Decision amending and modifying the Republic Pension and Disability Insurance Fund 2020 Financial Plan, Proposal of the Decision to grant consent to the Decision amending the Republic Health Insurance Fund 2020 Financial Plan, Proposal of the Decision to grant consent to the Decision amending and modifying the Social Insurance of Military Insured 2020 Financial Plan and the Proposal of the Decision to grant consent to the Decision amending the National Employment Service 2020 Financial Plan.
Committee Chairperson Dr Aleksandra Tomic said that the Fiscal Council had submitted an assessment of the Bill, and the Health and Family Committee and the Committee on the Economy, Regional Development, Trade, Tourism and Energy had proposed that the Committee on Finance, State Budget and Control of Public Spending accept the Bill in principle – sections 21, 27, 28 and 32.
The Bill was presented by Minister of Finance Sinisa Mali as representative of the submitter who gave a brief breakdown of the economic situation in the country under the COVID pandemic. He said that the state had allocated 5.8 billion EUR in aid of the economy under COVID, with a 5.1% GDP rise in the first quarter of 2020, but due to the crisis it would undergo a drop to minus one percent in 2021, and added that the second quarter of the year saw the lowest unemployment rate of 7.3%. The rebalance envisages a 743 million RSD or 8.75% deficit. The rebalance will cover all capital investments and aid for the healthcare sector, primarily construction of hospitals, procurement of equipment and one-time assistance to healthcare workers, said Minister Mali.
The President of the Fiscal Council Pavle Petrovic gave an assessment of the rebalance stressing that it is crucial that public investments have not been reduced which is something the Fiscal Council insisted on for years back. It is essential to channel these investments into areas where they would give the best results such as transport infrastructure, however education, environmental protection and healthcare are areas where investments are lagging. In the case of the healthcare system, the crisis both brought this to light and changed it, said Petrovic. He opined that income, expenditure and deficit are credibly planned, and the Fiscal Council believes that the drop in GDP growth would be 1.5%. The criticism of the rebalance i.e. discrepancies between the Fiscal Council and the competent ministry mainly concern the extent of the deficit which is almost 9% at the state level, and which should be lower and comparable with the countries of Central and Eastern Europe - 7.5%. Petrovic said that the reasons for such a large deficit lie in the broad support measures, primarily the 100 EUR awarded to the citizens and structural weaknesses such as the assistance to state and public enterprises and lack of transparency of the process.
Following a debate the Committee members accepted the Bill in principle.
The sitting was chaired by Committee Chairperson Dr Aleksandra Tomic and attended by the following Committee members and deputy members: Nikola Jolovic, Prof. Dr Vladimir Marinkovic, Ana Carapic, Olivera Pesic, Dr Milorad Mijatovic, Sonja Vlahovic, Goran Kovacevic, Svetlana Milijic, Adrijana Pupovac, Ana Beloica, Radovan Tvrdisic, Viktor Jevtovic, Milenka Subic, Annamaria Vicsek and Bratimir Vasiljevic.
