Asen Vassilev: I will not raise the salaries of officials in a hat
Following the Coalition Expert Council and the Tripartite Cooperation Council, he did not support the budget update. “After three hours of discussion, the opinions of the colleagues were mixed,” said after the tripartite meeting the Deputy Prime Minister and Minister of Finance Asen Vassilev.
“We did not see a guarantee for the continuation of compensation for electricity for non-household consumers. We insist that the anti-crisis measures be anti-inflationary, “said the Bulgarian Chamber of Commerce after the meeting.
“The increase of the pension ceiling from BGN 1,500 to BGN 2,000 from July 1 unbalances the system That is why we did not support the budget of the Social Security Fund “, said Vasil Velev from the Association of Industrial Capital in Bulgaria. “We hope that the amendment to the energy law will fix a specific commitment of the executive branch to provide energy for business at a competitive price,” the employers’ organization added.
However, the increase in the debt ceiling was supported. “We believe that this measure was overdue, it should have been made when the interest rates on government debts were negative,” the BICA said.
The unions were also dissatisfied with the project. Lyuboslav Kostov of CITUB said the union did not support all three budgets because they did not see an income policy. He predicted industry protests that the union would support. Vanya Grigorova from Podkrepa believes that while more expenses are made, there is no way to guarantee more income in the NSSI funds.
There are also differences in income policy. “Income policy in its traditional form – we raise by 10% or 5% or 15% of all employees’ salaries, is not provided in this update and the Ministry of Finance is against the provision of such a policy. There will be no increase in salaries per cap “, commented the Deputy Prime Minister and Minister of Finance Asen Vassilev the problem with the income in the state administration, after the tripartite council discussed the update of the state finances.
Various ministries, such as defense and interior, are working on optimization to allow institutions to receive more remuneration than the special fund set up earlier this year to support administrative reforms. There are over BGN 300 million in it, Vassilev gave an example.
Before the social partners discussed the draft updated budget, there was an expert coalition council. It became clear to him that the coalition parties do not support this option and want changes in it. As the plan is for it to enter the Council of Ministers on Wednesday and then immediately in committees, so that we have a ready budget on July 1, the PP partners are invited to make proposals between the two readings in plenary. DB, for example, will offer instead of 0.25 cents a discount for a liter of cheap gasoline when refueling the state to take 50% of the travel cards of employees. ITN will continue to push for lower VAT rates on fruit and vegetables.
The opposition also has its own proposals, such as the MRF will propose the creation of a special fund to support municipalities.
“The Ministry of Interior is very active in a very serious project, which includes separating the fire department from the ministry itself, restructuring the regional administrations so as to save from the administration, restructuring some of the main directorates,” said Vassilev with various increases in ministries and departments.
It was discussed at the council that the aid for the business should be provided with funds outside the budget, Vassilev specified.
“As the funds used for energy support go through the Energy System Security Fund and come through additional contributions from energy companies, they do not affect the revenue and expenditure side of the state budget as it is presented.” he explained.
Despite the crisis, economic growth will be 2.9%, consumption will increase by 3.3%, fixed capital investment by 5%. The budget deficit to remain unchanged – 4.1%. The expenditures of the state will be more than the revenues and therefore the treasury will have a deficit of 2.4%, and under the consolidated fiscal program – 4.1%. Inflation at the end of the year is expected to be 11.9% and real income growth – 9%.
According to the accounts of the experts from the Ministry of Finance, the effect on the budget from the compensatory measures will be at least BGN 600 million.
without social payments. For example, cheaper heating due to a reduced rate of 20 to 9% will cost BGN 15 million, and cheaper gas for the same reason – BGN 50 million. BGN 150 million will lose the budget from the discount of 0 , 25 cents per liter of gasoline and diesel.
The zero VAT rate for bread with the idea that it will become cheaper will deprive the budget of BGN 60 million. A BGN 13 million revenue gap will open the reduction of the legal interest rate by two percentage points.
The largest amount that will not go to the treasury are the tax rebates for children – BGN 230 million.
To compensate for these reductions, from July 1 this year. cigarettes, wine, beer, cigars and cigars will become more expensive
due to higher excise duty and return of the standard rate of 20% for them. Currently, beer, cigars and cigarillos from restaurant services, as well as liquid for e-cigarettes are subject to 9% VAT. All these measures are planned to be in force from July 1, 2022.
Compensation for lower budget revenues due to the package of measures is also envisaged for budget restructuring. Due to the delayed delivery of the new aircraft, the money provided for them will be reduced from BGN 1.8 billion to BGN 1.1 billion,
No money will be provided for new military equipment for the construction of battalion battle groups, and the repair and maintenance of the MiGs will have to fit in with half of the initially planned BGN 296 million.
The main social package is the modernization of pensions.
The budget provides for the financial provision of money for the elderly from 1 July and the introduction of a new mechanism from 1 October. The beginning of the reform of the pension system will cost the state 1, 38 billion levs more than the money for pensions.
The main changes in the social security budget, which were discussed by the social partners, envisage that all employment pensions granted until 31 December 2021 will be updated, as of 1 July 2022, by 10 percent. The additional amounts (the so-called COVID supplements) and individual compensatory amounts paid to the pensioners with an employment pension as of June 30 are included in the amount of the pension received by them after the application of the 10 percent update. The COVID supplement is also included in the amount of pensions or the sum of pensions and for pensioners who have exercised a pension right between 1 January and 30 June 2022. For pensioners who have exercised a right to a pension after 30 June 2022, BGN in the amount of the pension or the sum of the pensions received by them.
Thus, after July 1, the minimum amount of the pension for length of service and age
increases
from BGN 370
at BGN 467,
which is an increase of 26.2 percent, and the maximum amount of one or more pensions received increases from BGN 1,500 to BGN 2,000.
From the beginning of October, the maximum amount of one or more pensions received will be additionally increased to BGN 3,400. The amount of the old-age social pension and the related amounts of non-employment pensions, as well as supplements, will be increased from BGN 170 to BGN 247 as of July 1, 2022.
The updated budget introduces tax breaks for children. The amounts with which the parents will be able to reduce their tax for 2022 become BGN 6,000 per year for a minor, for two – BGN 12,000 per year, for three or more children – BGN 18,000 per year, and for a child with disabilities in the amount of BGN 12,000 per year. It is envisaged that the extra will be used in advance on a quarterly basis for income from employment.
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