bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 25.08.2019 | Name days: Patrīcija, Ludis, Ludvigs, Ivonna
LithuaniaLithuania

Lithuania opposition MP: «The ruling majority muddles through a «foxy» budget»

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

Linas Jegelevičius for the BNN

For the fifth consecutive year, Lithuania’s new budget, now for 2019, is described as «record» due to the size of surplus and the hefty allocations to education, health care, innovations and reduction of social inequality.

Finance Minister Vilius Šapoka touts it for being oriented to «strategic goals» of the state, whereas the opposition suspects that behind the generosity stands the coming elections to municipal Councils, the European Parliament and President’s Office, all due in the spring.

«The budget is likely to be approved by the ruling majority, however the draft raises many questions to many. It seems to me it is part of the ruling Farmers and Greens’ vehement self-advertising campaign, yet it little addresses the reality. The growth of salaries in many sectors is based on redistribution of the resources, that’s how it is,» Linas Balsys, a MP from the Lithuanian Parliament opposition, told BNN.

«It is ambiguous to speak about raise of cultural workers’ salaries after the Finance Ministry sent letters to many cultural organizations exhorting them to cut their expenses by 15 per cent,» reminded. «The ruling majority muddles through a «foxy» budget», he added.

According to the budget draft, the state budget’s revenue is set to rise 19.7 per cent, or 1.516 billion euros, to 10.587 billion euros, and expenditure will increase 22.2 per cent, or 2.121 billion euros, to 11.681 billion euros. The state budget’s deficit will stand at 1.095 billion euros, up 2.2 times, or 605.369 million euros, from this year’s planned deficit of 489.171 million euros.

The government’s total tax revenue is expected to grow by 30.1 per cent next year compared with this year to 8.019 billion euros. The value-added tax (VAT), the largest single source of tax revenue, should increase by 8.8 per cent to 3.85 billion euros.

To translate the numbers into the real-life picture, the minimum wage should go up by 30 euros to 430 euros and the average pension by nearly as much in 2019, child benefit, introduced in 2017, will increase from 30 euros to 50 euros per child under 18. The latter measure will require an additional 120 million euro from the budget and the indexing of pensions – another 220 million euro.

The financing of health sector is set to increase by 280 million euros, education sector will be allocated 185 million more, year-on-year, with the bulk of money to be used for salaries of teachers and scholars.

When summing up the budget, Lithuanian Prime Minister Saulius Skvernelis, called it «socially responsible» and said it will help «improve the quality of life» for a large part of the population.

«Importantly, the budget provides for the structural reforms approved by the government and the Seimas. These are education, social protection, health and innovation reforms and other important things aimed at achieving an improvement in the quality of life and income growth for our people. This is a socially responsible budget,» he emphasised.

The fast rise in budget revenue and expenditure is related to the planned tax overhaul (the consolidation of taxes on the employee’s side), as well as the transfer of the funding of the general part of the social insurance pension to the state budget, he insisted.

Differently from this year’s national budget ,which focuses on the lowest-income people, next year’s budget is oriented toward broader population groups, the PM noted.

«Quite a large amount of money, more than 600 million euros, is allocated for working population, including each of us. We focused on people on the lowest income in this year’s budget, but (next year’s budget) covers the so-called middle class as well,» said Skvernelis, who is expected to run in the presidential election under the flag of the ruling Farmers and Greens next year.

«In addition, we’ll form a reserve of more than a billion euros and we’ll have it in place as early as next year in case, God forbid, a crisis should occur someday. We’ll have a surplus budget and we’ll strictly adhere to financial discipline,» he said.

The Government head says that taxes for the employed will be reduced by 6 per cent over the next three years, a result of the tax overhaul.

«Our aim is to create and maintain 26,000 new jobs and spread the word about Lithuania as the Baltics’ most competitive country in terms of labour taxes,» Skvernelis underscored.

Although Finance Minister Vilius Šapoka estimates that the country’s budget surplus will stand at 0.6 per cent GDP next year, the exact numbers can be adjusted in the fall. The Minister also pointed out that the Cabinet «took into account» and «reflected» the ongoing international developments in finance markets when drawing up the budget.

«We have to acknowledge that the growth of world economy is slowing down and the growth is not stable and even any longer. And the Lithuanian economy is not an exception from the whole picture. Although we aim at a record-large new budget, we are accumulating throughout monetary reserves. The 2008 crisis has taught us a valuable lesson,» Šapoka said.

According to him, Lithuania aims to accrue 1,5 billion euros in reserves by the end of the next year.

Disagreeing with the Minister claiming that the new budget is a reflection of «structural and strategic reforms» being carried out by the Government, Ingrida Šimonytė, a Conservative MP and former Finance Minister in the 2008-2012 Conservatives-led Cabinet, lambasted Šapoka and claimed she «cannot» remember «a single reform» carried out by the Government.

«I really do not recall any. Perhaps the minister refers to the overhaul of teachers pay, which is merely dragging of the blanket from one teachers to others. We call it redistribution of resources, to employ the economic terms,» Šimonytė said.

«And I do not also understand why, for example, the indexing of pensions the Cabinet is also called «a reform». The laws envision indexing, so what are we here talking about?» the former Finance Minister wondered.

Justas Mundeikis, economist and lecturer at Vilnius University, also questions how the Cabinet is going to meet the budget targets.

«From what I see, two sources are foreseen for that. The first is from the growth of economy and the other is from the reducing of the shadow economy. Indeed, we can plan growing of the economy, not reduction of shadow economy,» he told BNN. «Thence a big risk that we can stumble upon the road and fail to collect the budget as we wish,» he added.

Although the Cabinet said it didn’t mull any new taxes in the new year, however there are rumours that the position may change with a gap in the budget.

Introducing higher tax for strong ale, a new tax for car owners and real estate owners has been among the raised ideas on the Lithuanian Parliament (Seimas) floor this year.


Leave a reply

Hot weekend ahead in Latvia

Over this weekend, in Latvia, a wide anticyclone will determine the weather keeping the sunny and mostly dry weather of Friday, according to the Latvian Environment, Geology and Meteorology Centre.

IKEA to land in Estonia from next week

Swedish furniture design and retail chain IKEA plans to enter the Estonian market on August 29. According to the firm, it would first open an online store.

Levits: People on Baltic Way melted totalitarian regime in their hands

During the Baltic Way people melted a totalitarian regime in their hands, said Latvian President Egils Levits at the occasion of the 30th anniversary of the peaceful mass demonstration marked at the Castle of Riga.

Turn in high-profile court saga: Ventspils mayor receives state lawyer

The mayor of the Latvian port city Ventspils, Aivars Lembergs, who is charged with serious crimes and has been suspended from office, has been appointed a state lawyer in the long court process that has had many delays.

No obstacles to Riga signing waste contract on 20 years, says ministry, despite probe

Latvian Ministry of Environmental Protection and Regional Development has stated that the plan by the Riga City Council to award a waste management contract on 20 years is not against the law, despite competition regulator investigating alleged violations.

Riga pledges to increase use of Latvian in its kindergartens

The Riga municipality will continue increasing the use of the Latvian language in the kindergartens of the capital, the responsible department of the Riga City Council has stated in reaction to calls to switch all kindergarten groups to the official language.

France supports new, short Brexit talks for UK to leave with deal

Emmanuel Macron of France supported new, month-long Brexit negotiations to avoid a no-deal Brexit, but was against the removal of the Irish backstop from the deal – a key demand by his guest British Prime Minister Boris Johnson.

Lithuania backs Sinkevičius as European Commission nominee

The Lithuanian parliament on Thursday, August 22, voted to support Virginijus Sinkevičius, the Lithuanian Minister of the Economy and Innovation, as the country’s pick for the next European Commission.

New member of Riga Freeport board rushes to meet controversial Šlesers, TV3 Ziņas says

Riga councilman Sandris Bergmanis has a day after being elected to the board of the Freeport of Riga Authority met with businessman and former Latvian minister Ainārs Šlesers, according to the news programme TV3 Ziņas.

Latvian power production drops to lowest level in year

Energy companies in Latvia produced 357 655 megawatt hours of power in July, which is the lowest level of national power output since July 2018. This allowed to cover 64% of the Latvian electricity consumption, according to AS Augstsprieguma tīkls.

Compensation payments of defunct Latvian PNB Banka begin

With operations of the Latvian bank, AS PNB Banka, stopped, the process of paying the guaranteed compensation to its clients has begun on August 22, according Citadele, the lender tasked with the payments.

Riga planning to introduce tourist fee – one euro per day

The Riga City Council is discussing a plan to introduce a tourist fee charging all places of tourist accommodation a fee of one euro per day.

Expert: With Belarus electricity freezing Baltics’ solidarity, Moscow is over the moon

In a blow to Lithuania’s far-reaching plans, Latvia has announced it looks forward to buying electricity from a nuclear power plant in Belarus’ Astravyets under construction 50 kilometres away from Vilnius.

WHO: Little risk from microplastics in drinking water

The World Health Organization has declared that the current level of microplastic particles in drinking water does not pose is not a serious risk for health, yet more research was necessary to determine their effects on human health.

Subsidies to controversial Riga transport company could increase by EUR 20 mln

Amid the criticism of the Riga municipal transport company Rīgas satiksme for its losses and their effect on the Latvian state budget, a plan has been voiced to increase its subsidies, now 120 million euros, by another 20 million euros, Latvian Radio reports.

Latvian Minister keeping adviser detained by corruption watchdog for now

Latvian Agriculture Minister Kaspars Gerhards will clarify the reason, why his advisor and the mayor of the city of Ogre, Egils Helmanis, has been detained by corruption investigators, to decide on keeping him in office.

Trump, Macron willing to readmit Russia to G7, despite Crimea annexation

The leaders of France and the United States have expressed their backing to readmitting Russia to the G7 conference of world powers in 2020, despite Ukraine’s Crimea still being held by Moscow, CNN reports.

Latvian excise tax income up by 8% in first half of 2018

The Latvian excise tax income in the first half of 2019 has been 521 million euros, –an increase by 39 million euros, or 8.1% – compared to the respective period last year, showed data by the Latvian State Revenue Service.

Latvian PM: Most of freely available 2020 budget funds already earmarked

Discussing the 2020 Latvian national budget, Latvian prime minister Krišjānis Kariņš pointed out that its fiscal space is limited by previous decisions and that the expected losses of the Riga transport company will not permit raising wages and pensions nationally.

Corruption watchdog detains Ogre city mayor Helmanis

The Latvian Corruption Prevention and Combating Bureau has on Wednesday detained the mayor of central Latvian city of Ogre, Egils Helmanis, according to LETA news agency.

New members to Freeport of Riga Authority elected, despite criticism

The Riga City Council elected to the Board of the Freeport of Riga Authority, mayor Oļegs Burovs and councilman Sandris Bergmanis, despite heavy criticism of the latter for incompetence and lack of vision.

Italy loses government, coalition of right-wing, anti-establishment parties collapses

Italy has lost its government with Prime Minister Giuseppe Conte announcing resignation after the right-wing League party pushed for no-confidence motion to its own government.

Kaljulaid opposed to Estonian minister after police chief scandal

Alleging that Estonian Interior Minister Mart Helme has violated the law by trying to sack top police chief, Estonian President Kersti Kaljulaid has stated that the minister has no place in the government.

Planned Latvian economic cases’ court conceptually backed by government

The plan by the Latvian Ministry of Justice to establish a court of economic cases has on Tuesday, August 20, been supported by the Latvian Cabinet of Ministers.

Newest comments