Spajić: The parliamentary majority should adopt the budget as soon as possible

The government expects the parliamentary majority to adopt this year's Bill on the budget of Montenegro as soon as possible because it is rehabilitative, fiscally responsible, fair, social in nature, with the basis for development and conditions for faster economic recovery, the Ministry of Finance and Social Welfare announced.

"I said the best in history because the maximum was achieved in relation to the upheaval that greeted us, a long-term interest economy for the enrichment of one layer of society and the largest drop in GDP in Europe of over 15 percent. We have a budget proposal of good hosts, not spendthrifts. This is a budget that does not bring benefits to elected officials, we have preserved salaries, pensions and social benefits, with increased allocations. We did not prioritize apartments for privileged and government loans under special/trivial conditions. Such privileged conditions could only be dreamed of by the most vulnerable citizens, health and education workers, young married couples or workers of defunct industries during the rule of DPS and partners", announced the Minister of Finance and Social Welfare, Milojko Spajić.

Spajić said that 2021 is the year of recovery, and reforms are the path to a real and safe recovery of the state's finances and economy.

He stated, as announced by the ministry, that this government did not pass the burden of the crisis onto the citizens because it did not decide to increase the value added tax (VAT) or the labor burden, which, thanks to the former government, are the highest in the region and beyond. on the contrary - with social partners we will try to find an optimal solution for that problem.

"We had the biggest decline in the economy in Europe in 2020 and we did not decide to cause a chain price increase by increasing VAT, or to introduce a crisis tax, or to freeze pensions, or to impose 'euro by euro' taxes that took millions of euros from citizens . We didn't do any of that, but we crossed paths with the previous practice when it was easiest to 'fight' through citizens' pockets for financial consolidation," said Spajić.

"State policy did not affect the increase in product prices"

The ministry announced that the VAT on eggs was reduced from 21 percent to seven percent, and that it was added to basic food products, including bread, flour, milk and milk products, fat, oil.

"As far as the state's policy is concerned, it has not affected the price growth of any of these products. On the contrary, we started to expand the list of products with a lower VAT rate of seven percent, precisely to help protect citizens from rising prices," Spajić emphasized.

The statement of the ministry adds that after the biggest recession, it was proposed to only partially change the excise policy in order to harmonize it with EU rules, and only for products that could negatively affect the health of the population, and we are negotiating everything with businessmen.

"All this in order to increase allocations for healthcare during the pandemic, where the Government of Montenegro is recording successful results, with excellent organization and pace of vaccination of foreigners", said Spajić.

The ministry adds that the budget proposal was passed by the home parliamentary Committee for Economy, Finance and Budget, without votes against, and that it has been in parliament for two months.

According to the ministry, Spajić said that for the first time we have a detailed structure and full implementation of the program budget, which will increase the transparency of the entire public finance system.

According to the announcement, the budget deficit in 2021 was projected at 139,1 million euros or three percent of GDP, and in 2020 it was 10,3 percent (over 425 million).

"The proposed budget measures achieve a significant fiscal adjustment and we will strive to reach that goal," said Spajić.

Spajić added that from devastated public finances and a state on the brink of bankruptcy, it came, in record time, to sustainable public finances.

"We achieved significant savings of over 150 million euros, with the reduction of unnecessary costs, but with the preservation of salaries, a slight increase in pensions due to regular legal adjustments and higher allocations of social benefits. Funds for financing the health system and mass vaccination of the population against the covid-19 virus have been increased. We know where we need more - health workers will be among the first to increase their salaries, who were recently paid a stimulus of 250 euros each, as a thank you from all citizens for everything they do in the fight against this scourge", said the minister.

"We are doing everything to achieve the projection of 65 percent of tourism revenue from 2019"

It was announced that in a few months of the work of this Government, an increase in the minimum wage from 222 to 250 euros or by almost 13 percent was ensured, which, as they stated, affects the growth of the average wage, and as a result, conditions are created for an increase in social and other benefits due to legal adjustments.

"With social partners, we are also looking for a solution to relieve the economy due to the increase in the minimum wage. We have created the conditions for the introduction of an allowance of 30 euros for children in preschool age, free textbooks for all primary school students, an increase in the old-age allowance to 70 percent of the minimum pension, and we have provided the founding capital and the purchase of aircraft for the new Montenegrin aviation ambassador - Air Montenegro", he said. is Spajić.

At the same time, as Spajić added, in the fight for a successful tourist season, we have open borders, we help the economy with support packages, hospital treatment is provided at the expense of the state for all tourists who may fall ill with covid-19 during their stay in Montenegro, with free PCR testing for all guests who need it when returning to their home country.

"We are doing everything to achieve the projection of around 65 percent of tourism revenue from the record year 2019," Spajić said.

"More generous than Greece in subsidies"

Spajić stated that the Government already had two packages of measures to support the economy and through them strongly encouraged employment. To increase the number of employees, we exempt employers from duties - 90 percent of taxes and contributions in 2021, 60 percent in 2022 and 30 percent in 2023.

He also pointed to the importance of wage subsidies with an expanded list of economic activities.

"We were more generous in subsidies, for example, than Greece, even though we are in a much poorer position," Spajić added.

The introduction of labeling of mineral oils and their derivatives is another of the Government's measures to suppress illegal traffic, improve the quality of derivatives on the market and increase budget revenues, the Ministry of Finance announced.

"The most modern nano-technologies will be used for marking. We will prevent fuel that is not marked in the prescribed manner from being found in circulation. In addition to the increase in budget revenue, the owners of motor vehicles will also benefit directly, because they will have fuel of exclusively prescribed quality," emphasized Spajić.

State-majority-owned companies and subsidiary companies were asked to pay the net profit from the previous year to the budget of Montenegro in accordance with the state's ownership share. Spajić added that the capital budget is larger, most of which goes to the highway, but that it will be satisfied only in the next budget and in the following years.

"We want an even distribution of the capital budget"

"Now we have to pay inherited, contracted obligations for projects that do not bring even development in the country. I agree that more money is needed for certain municipalities. This Government will provide that, but so that the capital budget is evenly distributed. We will not allow the same projects to be prolonged for years without completion, and that citizens' money is allocated every year for these purposes, while in reality nothing happens," said Spajić.

He added that he particularly regrets, among other things, that until now more substantial investment has not been made to make Cetinje a developed city, as befits a capital city.

"With household management, we can all achieve the maximum in the interest of the state - and with as much money as is foreseen, that is, as much as it is possible to have after taking over the broken system", said Spajić.

He stated that the issue of Montenegrin bonds on the international capital market in December 2020 ensured the stability of public finances and that the state would be a regular payer of all financial obligations. He also indicated that the debt has already been reduced, and it is planned to gradually reduce the public debt to the level of 70,6% of GDP in 2023.

"It is projected to reduce the budget deficit to below 1 percent of GDP in 2022, after which the budget balance will move into the positive zone and achieve a surplus of 1,2 percent of the projected GDP.

Real economic growth rates are planned at 10,5% in 2021, 6,5% in 2022 and 5,8% in 2023," concluded Spajić.