Passions for the 2021 budget in the Seimas again: the new government promises transparency spending millions, it will not affect single-member members | Deal

According to Finance Minister Gintarė Skaistė, the main focus of the budget amendment was to reduce the negative consequences caused by the coronavirus pandemic, as well as to comply with the obligations provided by legal acts.

The revised budget foresees 1,240 million euros. additional costs of 934 million euros, of which for the management of COVID-19.

Social security will be the main source of funding for the virus, and sickness and disability benefits and downtime subsidies amount to € 120 and € 180 respectively.

By narrowing the circle of benefits for the self-employed and the unemployed, a total of LTL 100 million goes to these measures. euros.

The Ministry of Economy and Innovation allocates 230 euros. Of these, 150 million. 30 million euros are earmarked for business grants. soft loans, 17 million. 33 million euros for compensation of interests for small and medium-sized companies and 33 million euros for other aid. euros.

The health sector will receive 145 million. 65 million euros for vaccine and the remaining 80 million – Commitments with suppliers and laboratories.

Another important news is that 744 million euros have been eliminated from the draft budget. € 5 million in revenue (respectively expenses) related to the EU Fund for Economic Recovery and Resilience, which has not yet been fully approved in Brussels.

These funds will finance part of the DNA Plan for the Future Economy, but only when the exact amount of allocations and the criteria for project selection are completely clear, the finance minister said.

“The budget review will be planned for the spring session,” G.Skaistė said, adding that then it will be possible to include funds from the Economic Recovery and Resilience Building Fund in the state treasury.

The remaining costs are about 300 million. EUR – foreseen for the implementation of previous statutory obligations: additional indexation of pensions, additional funds for national minority schools, preschool education of children at social risk.

The government anticipates that the deficit of the public administrations will reach 7% next year. Gross domestic product (GDP): 2 percentage points more than planned by the previous government.

Individual members and “financial engineering”

G.Skaistė, who received several questions, promised greater government transparency and not to please the single-member members.

Kęstutis Glaveckas, who works in the Joint Group of Seimas Members, asked if the Government would allocate public money to specific districts so that the sole members elected here would support the budget.

“I have to upset many one-man members who imagine that any project that did not exist can be included in the State Investment Program, and that there is only a question of good will here,” said G.Skaistė.

According to her, according to the recently amended legislation, new projects are not included in the investment program until the old ones are completed.

Valius Ąžuolas, the representative of the “Peasants”, asked the Minister why the 5% budget deficit was “mechanically increased” to 7 percent.

According to him, this may worsen Lithuania’s borrowing opportunities in the future.

V.Ąžuolas also asked why the new government decided to stop applying the funds necessary to manage the outgoing government practice COVID-19 simply by setting a borrowing cap, thus avoiding a larger projected deficit.

“I understand, maybe someone doesn’t trust the government very much and says that the best way is to go through the Seimas every time, but you will face a big problem when you have to do it all the time,” said V.Ąžuolas.

G.Skaistė explained that he saw no problem in submitting budget corrections to the Seimas more frequently, if necessary, because the government could not spend money arbitrarily.

“For the funds to be spent, there must be a mandate from the Seimas. This is the Constitution of Lithuania and first of all we have to budget for all the expenses, because it is possible to plan them today,” said the Minister of Finance.

“Personally, I don’t think the possibility of the government borrowing those funds and spending them through government resolutions is a very transparent decision,” he added.

The minister called this behavior “financial engineering.”

Predict grim 2022 awaits

Algirdas Sys, a spokesman for the Social Democratic opposition, said his conscience did not allow him to harshly criticize the budget.

“It just came to our knowledge then covid and that would be his prepared budget, that criticism would flow freely, “said A. Sys.

He argued that the Socdemas understand that the state must first overcome the pandemic and it will be possible for the government to be much more demanding later.

However, the MP said he missed more drastic changes to the tax system to tax the rich more. According to him, the additional budget revenue generated in this way would also help in the fight against the coronavirus crisis.

Wishing the new Finance Minister success, he called for him to take office at least next year.

“At the same time next year, I hope to thank this government,” Sys said.

Representatives of the Labor Party saw rising public debt next year as one of the key dangers.

“The biggest concern is that we seem to have one of the largest budget deficits in the EU and we lack a clear and detailed debt management plan,” said Vigilijus Jukna, a Workers’ Group elder.

According to him, reducing long-term debt will require cutting public spending or raising taxes.

K. Glaveckas saw similar risks. According to him, if the COVID-19 pandemic is overcome next year, the fiscal discipline requirements released by the European Union will expire, which means a good 2022.

“The year 2022 can really start with a huge well for us, because from 7 percent. To reduce the deficit to 2 or 3 percent. It is very difficult,” said the MP.

Even my own worries

Eugene Gentvil, a spokesman for the ruling Liberal Movement, also said he was concerned about the budget. The politician questioned whether the Ministry of Economy and Innovation would contribute 230 million for the rescue of companies. The growth in municipal budgets will be too small.

He also said it was worrying that public debt could be even higher next year than projected by about 50 percent. of GDP or about 25 billion. euros.

Thus, according to E. Gentvilas, next year’s state budget is “a great commitment with the hope that the pandemic will end soon.”

Artūras Žukauskas, a representative of another ruling Freedom Party, also said he would support the budget, but with “heartache.”

“It just came to our attention then. The main changes in the budget are reactive,” said the Seimas member.