Minister of Finance Aleksandar Damjanović said in his introductory speech at today's Committee for Economy, Finance and Budget that the budget proposal for the next year is a statement of the current financial situation in the country.
"It is sustainable, realistically based and preserves the level of living standards of this country and it is in the function of revitalizing our economy, which with its activities should contribute to economic growth in the coming years," said Damjanović.
Today, the Parliamentary Committee for Economy, Finance and Budget is discussing the budget proposal for the next year, with a proposal for a decision on borrowing.
He said that the budget for the next year has the highest percentage of mandatory expenditures ever, due to the policies of past governments, and they relate to pensions, wages, social expenditures...
"About 785 million euros have been defined for transfers for social protection. There we have additional funds for child allowances, to increase pensions..." he said.
He repeated that the goal is for the average pension to be at the level of 60 percent of the average salary in the coming years.
He added that wages in the public administration will grow linearly, for which 67 million will be allocated.
"We have an increase in the capital budget, if we exclude allocations for the highway, with 294 projects with 44 new ones...".
He said that the revenues in the budget are planned conservatively, that is, he expects them to be even higher than predicted through the expansion of the tax base.
"The economy is planned to grow by four percent and we consider it a conservative plan," the minister said.
He said that the budget envisages increased allocations for the Health Care Fund, whose debts, as he stated, have been reduced to zero.
He said that the budget breakthrough is in the part of allocating money for compensation, i.e. restitution.
He announced that the deficit was projected at 5,9 percent, or 366 million euros.
"We will see what economic growth will be at the end of 2023. If it is better than conservatively planned, the deficit will be much smaller," said Damjanović.
The proposed budget for next year is worth 2,8 billion euros or 165 million more than this year.
Debt of up to 599 million is expected for the next year, the largest part of which refers to the return of old loans and obligations from previous years in the amount of 365 million and interest of 108 million. The remaining part of the debt relates to the capital budget and the creation of reserves.
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"We expect that the level of deposits will be higher than projected at 100 million, so the level of indebtedness will be lower. We are working intensively, we are communicating with four or five recognizable banks. We have some announcements that we will fulfill our financial structures for the next year," said Damjanović. .
Dabović (DRI): The possibility of flexible borrowing is not left
Representatives of important institutions and organizations in the country also attend the Board sessions.
Milan Dabović, a member of the senate of the State Audit Institution, said that in the technical part of the budget, the figures were harmonized in accordance with the proper balance sheet for the presentation of the law.
He said that the asymmetry was created in the budget planning of the Health Fund and the Employment Agency (ZZZ) because there is a lack of money compared to the designated revenues.
He said that healthcare spending amounts to 386,59 million euros, with original revenues of 1,2 million euros, so approximately 385,29 million euros are missing.
"That is the largest gap in relation to the earmarked revenues that had to be covered from the general revenues of the budget," said Dabović.
ZZZ lacks, as he said, 30 million compared to dedicated revenues.
In addition, Dabović said that the SAI is worried because the Ministry of Finance did not leave the possibility of flexible borrowing in the next year because it "very rigidly" approached borrowing.
"It is good from the aspect of fiscal discipline, but I don't know how practical it can be in the next year in terms of the risk of financing sources," said Dabović.
CBCG: There is not a single major infrastructure project in the capital budget
The representative of the Central Bank of Montenegro (CBCG), Marijana Mitrović Mijatović, said that the CBCG recognizes the risks of a macroeconomic nature, which are related to high inflation and the realization of real growth.
"The risk that the CBCG warns of the most is the risk of tightening financing conditions on the global market due to the tightening of the European Central Bank's monetary policy," she said.
She added that they believe that in the conditions of inflation, this kind of budget is an adequate answer.
In the part of the capital budget, she said that there is no single major infrastructure project that would lead to multiple effects on the Montenegrin economy.
She stressed that it is necessary to avoid further increases in spending or tax cuts for which there are no sources of financing.
PKCG: Increase allocations for agriculture
The Vice President of the Chamber of Commerce (PKCG) Nikola Vujović announced that he is happy that the support for the economy has continued, and that it is good that the level of foreign investments is increasing compared to last year.
He stated that the planned capital budget is less planned compared to the period before the crisis, and that it does not contain projects that would lead to the development of the economy.
He assessed that allocations for agriculture are two percent of the total budget, while countries in the region allocate up to five percent, and he is of the opinion that these allocations should be increased.
"The key problem is the gray economy and all activities in that direction should be made as efficient as possible," he said.
He also said that the threatened liquidity of the economy should be helped by means of a more effective VAT refund.
"That is to say, to increase that the money is returned faster and more efficiently when there is no reason to keep that money longer than the stipulated period", he announced.
"Proposals of municipal projects do not meet basic requirements"
General Secretary of the Association of Municipalities of Montenegro Refik Bojadžić criticized the ministry because the municipal units were not consulted during the preparation of capital projects.
"We consulted municipalities and received project proposals from 15 municipalities that had to, but were not included in the capital budget, and they don't understand why," said Bojadžić.
Their initiative is to coordinate these projects with the ministry and include them in the capital budget.
State Secretary in the Ministry of Finance Bojan Paunović said that 170 project proposals were submitted to them from the municipalities.
"The vast majority, over 100 projects, did not meet the basic conditions to be an integral part of the budget. I invite the same municipalities to propose the same projects next year if something happens that will make those projects more mature," said Paunović.
He added that the proposals of the municipalities lack supporting documentation that should justify a certain project being included in the budget.
He said that not a single request from the municipalities was in the ministry for two days.
Association of Managers: Instead of producing, we borrow
The President of the Association of Managers of Montenegro, Budimir Raičević, stated that it is questionable how the social allocations of 785 million euros will be financed, when no new value is formed.
He also pointed out that the unstable political situation affects the economy.
He said that there is a continuity of the economic policy that placed Montenegro "in a total import destination".
"We are now in a situation where we are not producing, but we have social needs at the level of the whole of Montenegro, and then the answer is to take on debt. This budget is a warning for everyone, and we welcome it because there is no increase in tax burdens," he said.
Sošić: The number of projects in the capital budget is enormous
Marko Sošić, a public policy researcher at the Institute of Alternatives, stated that he agrees with the criticism regarding deviations from the macroeconomic and fiscal policy guidelines, which were adopted back in August.
He said that the number of projects within the capital budget is huge, which is not in accordance with the report of the International Monetary Fund, which assessed that Montenegro does not have a well-defined procedure for how we choose, what and how we build...
"We lack systemic action in this area, not just the addition of new projects," said Sošić.
He said that of the 27 amendments to the budget that are currently proposed, 80 percent refer to the addition of new capital projects worth 100 million euros.
"If we switch to the tactic of making budget support conditional, even these projects will not be implemented," he said.
He added that there was no progress in the planning of the program budget, but a setback in certain parts.
"35 percent of projects do not have defined goals, 45 percent do not have defined indicators and over 60 percent do not have sources of information. This is a huge inaccuracy," said Sošić.
He added that the explanations of this year's budget in the organizational classification part are much more detailed.
Keković: Reduce the fees of former officials
The secretary of the Union of Free Trade Unions, Srđa Keković, said that once again the unions were not involved in the creation of the budget.
He praised the 20 percent increase in wages in the public sector.
He said that it is not transparent how certain items in the budget are presented and added that it is necessary to form the tax police.
"For years, we have been insisting that responsibility be introduced at all levels. We have information that funds from the budget are being spent irrationally," he said.
He announced that there is a huge space in suppressing "undocumented" work, where up to 40 people work.
"Absolutely nothing is being done about it," Keković said.
He also stated that abnormal compensations are also planned for former officials.
"It is an area for great abuses and we ask you to regulate it as soon as possible," said Keković.
He also demands systemic changes to the Law in the public sector.
Rakočević: We are asking for the salary coefficients in the public administration to be harmonized
The President of the Administration and Judiciary Union, Nenad Rakočević, said that this union includes 20 employees, and is demanding that the demands related to the branch contract be met, and that the wage coefficients be harmonized with the Europe now program.
He said that they are complaining because the budget proposal is not in line with the need to increase wages in the public administration, which he said are the least in the region. He pointed out that this can be compensated for by reducing expenditures.
The representative of the Education Union, Radomir Božović, said that they did not participate in the formation of the budget. He said that they expect to sign the branch collective agreement in the coming days. He added that in the part of basic education, too much money goes to salaries and stated that out of the planned 103 million allocations for that sector, 96 million will go to salaries.
Paunović: It is not just a matter of predicting the money, but of using it for the purposes for which it was planned
Speaking about the capital budget, State Secretary in the Ministry of Finance, Bojan Paunović, said that it was increased compared to the current year.
"It's not just a matter of predicting the money, but using it for the purposes for which it was planned. This year there was a price disturbance, which affected the need to revise the existing contracts in the capital budget... We expect that at the beginning of next year, there will be a unique concept of changes to the existing of the contract and that preconditions will be created for more flexible signing of contracts in execution and their changes in order to speed up the execution of the capital budget," said Paunović.
He said that out of the 200 million capital budget, 110 million refers to allocations for road infrastructure, and the second largest segment is tourism, which will affect investment development.
Minister Damjanović said that they did not accept the advice of international partners to increase VAT rates and reiterated that there is huge potential when it comes to the approach to tax policy.
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