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The final vote on next year’s budgets is scheduled for Tuesday, December 22.
Presenting the most important changes to the updated budget, Finance Minister Gintarė Skaistė said at the meeting that most of them are related to costs related to managing the consequences of Covid-19. According to her, the lines related to future specific support from the European Commission, which has not been finally approved, have been removed from the income and expenses of the draft budget.
According to the minister, the updated budget has increased spending by more than 1.23 billion. euros. Most of them will be used to reduce the effects of the coronavirus.
In the updated draft State Budget Law, the state budget revenue for 2021, including the European Union and other international financial aid, amounts to LTL 11.2 billion. euros.
State budget allocations for the acquisition of expenses and assets in 2021, including the European Union and other international financial support, amount to 15.82 billion. euros.
Budget appropriations exceed revenue by € 4.57 billion. euros. Lithuania will need to borrow these funds next year and repay them in the future.
Warns of growing debt
During the discussion at the Seimas, conservative Mykolas Majauskas said he saw two major challenges: financing the health system (vaccines, protection measures, treaty wages) and preserving employee income (downtime benefits, benefits for the self-employed, etc.).
The deputy said he was not proud that public spending was much higher than revenue and that a lot of money would have to be borrowed to cover the budget deficit. However, there is no other way out, since it is necessary to fight the virus and respect the commitments made by the previous government.
The “peasant” Robertas Šarknickas expressed doubts that the new budget allocates too little money to municipalities. He also feared that small entrepreneurs would be disadvantaged by the new stringent requirements and that large traders would only win.
Freedom Party spokesman Vytautas Mitalas was pleased that the government has improved the budget, for example by providing additional funding for measures to combat the coronavirus. He was also satisfied that small and medium-sized companies reach 230 million. 80 million euros will be allocated to the municipalities. euros. Also, according to him, it is good that money is allocated to increase pensions.
Vigilijus Jukna, who represents the Labor Party faction, said several extremely high budget deficits and mounting debt, which will hit $ 25 billion next year, are concerning. or about 50%. gross domestic product. It is said that it requires an increase in taxes, which will be difficult due to the pandemic, or a rational reduction in profits.
Speaking on behalf of a mixed group of Seimas members, Kęstutis Glaveckas regretted that, unlike in previous years, the entire Government and the Prime Minister did not participate in the discussion of such an important state budget. According to him, the big challenge next year will be up to 15 percent. increased unemployment. Reducing it will require time and investment. Over the next few years, this will require additional spending on social security.
The representative of the Liberal Movement Eugenijus Gentvilas admitted that the updated budget is worrying only because Lithuania’s gross domestic product may contract now and in the near future. The Seimas member doubts that the 230 million planned will be enough to promote business. as well as whether the funds provided will be sufficient for the municipalities. He is also concerned about the huge deficit and mounting debt.
The Social Democrat Algirdas Sysas wanted the government to implement an improved budget. If it weren’t for the current circumstances, criticism of him would flow freely, but a pandemic would change everything. The MP paid no more attention to the tax changes in the project. In his opinion, as in other countries, during the crisis, taxes should be raised for those who live better, as well as for capital.
Profits continue, but no new money?
Former Minister Linas Kukuraitis was pleased that the updated budget left funds for some of the work already started. I had many questions about the promised new benefits for single people. According to the Seimas member, the budget does not provide funds for this, although people have raised expectations.
Lukas Savickas stated that he had found only two significant budget differences compared to the previous one, which was prepared by the Government of Saulius Skvernelis. According to him, the biggest risk is the withdrawal of funds from the DNA plan for the future of the Lithuanian economy. The biggest problem is that it will take a lot of valuable time to prepare new investments. He is also concerned about the inflated budget deficit, which will increase debt. To cover this, it may be necessary to significantly increase taxes or reduce public spending in the future.
Remigijus Žemaitaitis considered that the 2008 night tax reform. He noted that the budget foresees the possibility for members of the Government to spend 400 million LTL without the control of the Seimas. reserve euros. The MP lacked additional funding for municipalities, despite the fact that the government owes them tens of millions of euros.
According to the Statute of the Seimas, in the year in which the ordinary elections are held (as it was this year), the second reading of the state budget is convened in the session of the new Seimas no later than December 18.
During the Seimas session, the government representative announces what has been modified in the state budget project taking into account the recommendations of the European Commission, proposals from committees, factions and individual members of the Seimas entered in the state budget project.
After the discussion, the appointment of the approval of the law on the approval of financial indicators of the state budget and municipal budgets will be voted in one of the next sessions of the Seimas.
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