Spajić: There will be no need for debt

The Minister of Finance and Social Welfare, Milojko Spajić, said that the Bill on the Budget for 2022 is an investment in two directions, namely in human resources through the "Europe Now" program, and the other direction is through capital investments.

"We have radically improved the state of finances and improvements are visible. We can state the great success of the Government, which turned around a difficult situation in which it found itself and radically improved the state of finances," Spajić said at the Committee for Economy, Finances and Budget, which started a two-day discussion on the budget proposal for the following year.

Spajić assessed that progress in public finances is evidenced by the fact that economic growth this year will exceed the Government's latest predictions of 13,4 percent, that is, over 14 percent.

The minister said that the main goal of the fiscal policy for the period from now until 2024 is the stabilization of the macroeconomic environment and public finances and the creation of preconditions for dynamic economic growth at the level of an average of five percent.

Spajić announced that the original revenues were projected in the amount of 1,97 billion euros, while expenditures were at the level of 2,21 billion, while the capital budget was newly projected at 252,18 million euros.

The budget deficit in the coming year is planned at the level of 243,1 million euros or 4,5 percent of GDP.

"292 million is planned for debt repayment in the next year, and the total missing funds are projected at the level of 497,94 million. It is expected that no new debt will be needed to finance the budget in the next year," Spajić said.

The first part of the session today was devoted to the presentation of views on the budget proposal for this year by representatives of business associations (Chamber of Commerce, American Chamber of Commerce), Association of Managers, NGO sector, trade unions, SAI and CBCG.

For the first time, representatives of the Employers' Union (UPCG) and the Union of Free Trade Unions (USS) did not appear at the board meeting, where interested parties present their views on the budget proposal every year.

The President of the Senate of the SAI, Milan Dabović, said that the fiscal risk for the budget is the basis for planning income for the next year.

"According to the projections for nine months of this year, we have realized profit tax of 69 million euros, and the projections for the next year are 60 million. This is impossible, because the profit tax cannot be reduced by nine million. VAT and excise taxes are linked to GDP and if we have their big their, then we also have a jump in GDP. The fact that for 2022 GDP is projected to be 8,7 percent, but when we look at VAT, the growth is around 20 percent," said Dabović.

CBCG representative Marijana Mitrović Mijatović said that the "Europe Now" program has major fiscal measures and risks, that they welcome the main goal of improving standards, but share the opinion of the International Monetary Fund (IMF) that the program should be implemented in phases.

"For primary income, we have 15 measures, but the risk is that a number of them require a longer revival. Excise taxes can increase the gray economy, especially on tobacco products. The redistribution of labor costs can lead to a reduced number of employees, and there are risks. Safeguarding assets requires an additional period of time. , because the bill has not yet been adopted," Mitrović Mijatović said

PKCG believes that it is necessary to increase the minimum in stages, because the amount of 450 euros will burden small and medium-sized enterprises, which are the backbone of the Montenegrin economy, and increase their costs. The president of the PKCG, Nina Drakić, said that there is a risk in the excise section, and that previous years have shown that sudden changes in the excise calendar led to the growth of the gray market by up to 40 percent. "The draft law on excise taxes should be considered once again and what the economy has to say. There were countries that joined the EU and were given a period of four years to harmonize their excise policy," said Drakić.

The executive director of the American Chamber of Commerce, Marko Miročević, pointed out that for years they have been insisting that the business community be involved in the timely adoption of laws concerning its operations, that the revenue side of the budget should be rationally looked at, and that estimates of tourism growth should be cautious and taken into account risks that the pandemic is still ongoing.

The representative of the Association of War Veterans of the 90s, Radan Nikolić, requested that 110.000 euros be earmarked through the current budget reserve through an amendment and that this money be distributed equally to all veteran organizations.

The representative of the NGO Institut Alternativa Marko Sošić assessed that not enough was done to reform the capital budget and that the recommendations of the SAI, which on two occasions pointed out the immaturity of the capital budget, were not followed.

Sošić said that they are concerned about transparency in their work because they could not get the score sheets for projects from the capital budget and the IMF report regarding capital projects (PIMA report). He also pointed out that the Ministry of Finance does not publish regular reports on program budgeting.

Sošić recommended the Committee for Economy to be more active and to seek the information he indicated from the line ministry.

Spajić claims that the PIMA report has not yet been completed.