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Sunday 17.11.2019 | Name days: Uga, Hugo, Uģis

Round dance over? Latvian government agrees on 2020 budget in spite of difficulties

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

Judging from the last talks held by parties it can be concluded the coalition has reached an agreement on the state budget, said Attīstībai/Par! co-chairman Daniels Pavļuts.

He says that budget formation had been discussed in detail many times in the past, with discussions running in circles.

The government’s agreement to support the previously discussed offer to increase maximum annual differentiated non-taxable minimum in 2020 to EUR 3 600 a year or EUR 300 a month, said the politician.

The government also supported increasing minimal wages to EUR 500 in 2021.

KPV LV Saeima faction deputy chairman Ēriks Pucens notes that the coalition has conceptually agreed on the budget, numbers detailed therein and terms in relation to raising non-taxable minimum in 2020 and raising minimal wages in 2021.

Pucens said he hopes this agreement remains in force and the situation will not change at tomorrow’s meeting.

New Unity politician Arvils Ašeradens admits the main bulk of work in this matter has been done.

The politician stresses that the coalition has managed to find solutions to nearly all objections and requests to find a balanced compromise.

The agreement provides for support of the previously made decision in regards to postponing construction of Liepaja Prison until 2022 so that it is possible to divert money to more immediate priorities.

At the same time, next year and the year after that it is planned to divert finances for a repeated tender for construction of the prison, adds Pavļuts.

The next step is viewing this topic at the next government meeting, adds Pavļuts. He allows for the possibility that the government meeting could be announced on Friday, 13 September.

On 6 September, following a request from New Conservative Party’s invitation, the government decided to postpone for a week decision-making processes on diversion of finances on priorities.

Ministers could not reach an agreement on the terms of Liepaja Prison’s construction – starting next year or postponing it to 2022. Finance Ministry calculated that postponing the construction would free up more than EUR 170 million for priorities in 2020.

After the meeting Justice Minister Jānis Bordāns said the contract on Liepaja Prison’s construction will not be signed with SIA Abora construction company. The minister made this decision, «considering the situation on Latvia’s market and that the coalition lacks any support for allocation of funding for construction», because technically it is offered to postpone construction project for several years, which would in turn mean organizing a new tender.

NCP reported that coalition partners intend to focus on previously presented proposals, including the proposal for minimal wages and non-taxable minimum of EUR 500.

According to Finance Ministry’s estimates, the fiscal space for 2020 is EUR 178.1 million. Of this amount, EUR 152.6 million is planned to be allocated for priorities of ministries, whereas EUR 25.5 million is planned to be allocated for priorities of independent institutions.

EUR 32 million is planned to be diverted on increasing non-taxable minimum to EUR 300 on 1 January 2020. The coalition has also agreed to increase non-taxable minimum to EUR 400 in 2021 and EUR 500 in 2022. Increase of minimal income level in 2020 will require the state budget to divert EUR 10 million.

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