President Nausėda signed the 2021 budget

“Four years before the pandemic, Lithuania had a public finance surplus. Strong pre-crisis positions now allow it to help the country’s health system, the population, and the country’s businesses cope with the challenges of a pandemic. . But 7 percent next year. The budget deficit at the GDP level should be a short-term phenomenon: temporary aid measures cannot be converted into permanent expenses, “said the president, emphasizing that the principle of cost balance and benefits should be seen in budget execution and when deciding to use EU funds next year.

At a press conference on Tuesday, Simon Krėpšta, the president’s senior adviser and head of the Economic and Social Policy Group, said a massive aid package would be formed next year, focusing on three main areas.

“Today, an hour ago, the president signed the state budget project with all the acts that accompany it, including the health budget and the social security budget.

The president has a positive view of the fiscal surplus of recent years, which in principle allows the formation of a fairly massive aid package next year, targeting three main areas.

“First, a massive aid package was formed for our healthcare system, second, to preserve and support the income and commercial viability of the population, and third, to address long-standing problems such as poverty. of older people, “he said.

S. Krėpšta assured that almost 400 million will be allocated to the health system next year. Eur more than this year, pension financing is growing by 350 million. EUR.

“Certainly, short-term, one-off expenditures should remain one-time and not become permanent, and in the future the Government and the Seimas will have to find ways to reduce mounting debt and achieve the president’s strategic goal of increasing debt. public finances and revenues at the optimal level of 35% compared to our economy.

To achieve this, next year it will be necessary to take measures to reduce the shadow and increase tax justice (measures-ed.) ”, He said.

When asked what could be the ways to reduce shading, S. Krėpšta stated that sectoral digital methods to reduce shading have been successful in other countries. As an example, he cited the builder’s identification system.

He said it could help digitize the builders business and make it clearer.

Speaking about how to reduce the country’s debt, S. Krėpšta said that this can be done in various ways.

“Looking ahead to next year, you need to prepare for debt and deficit reduction next year. This can be done in two ways. First, the one-time costs forecast for 2021 do not carry over to 2022 and do not become permanent. Second, there is a constant increase in state revenues and this can be done in two ways: reducing the shadow, increasing the fairness of the tax system, reducing the number of unjustified exceptions, “he said.

According to the presidential report, according to the country’s president, next year’s budget is focused on three currently most important areas: the health system, assistance to the population and business, as well as solving long-term problems. dates from the country. Expenditures on the health system in the state budget, compared to the previous period, increased by 276 million. In terms of total public budgets, this increase is around 445 million euros. euros.

The total multidirectional aid package for the coronavirus pandemic (COVID-19) exceeds one billion euros. euros. The funds will be used for grants to companies during downtime, freelancers, job seekers, sickness benefits (disability), financial aid to companies, medical and medical equipment, medical salaries and institutions involved in the fight against the pandemic.

The largest change in financing in 2021. recorded in the field of social security, which is directly related to the well-being of the population. About 353 million will be allocated to increase pensions next year alone. more than in the previous period. The average old-age pension for the elderly is expected to increase from € 377 to € 415 next year.

According to the president, even in the face of a pandemic, it is necessary to pursue the strategic objective of reducing the unacceptably high levels of poverty among pensioners and thus achieve greater justice.

“The well-being of a society can be judged by the situation of its elderly people. Next year, pensions will increase by one tenth and the poverty rate in the elderly group is projected to decline by almost one fifth. Maintaining this rhythm and the correct priorities, in a few years we can expect a great advance to ensure a dignified old age for the country’s citizens, ”said the President, in line with the child’s money and other social expenses that will increase next year.

The head of state also noted that in 2021. the budget pays more attention to the country’s regions. Municipal budget revenue, along with state budget grants, is projected to grow by nearly 11%. Additionally, municipalities will be able to borrow up to $ 58 million if necessary. euros.

However, according to the president, opportunities for municipalities to invest and create smarter smart regions will continue to face challenges, requiring a greater search for solutions for increased investment in the country’s regions. The EU Recovery and Resilience Fund will play an important role, offering a unique opportunity to raise the entire country to a higher level of quality. However, at the same time, it means preparing for the responsible investment process in the shortest time possible.

The head of state welcomes the fact that the budget for the pandemic remains highly focused on national security. Defense spending is projected to reach at least 2.03 percent. GDP with the possibility of increasing up to 2.05%. GDP.

In order to achieve high-quality public services for the citizens of the country, as well as progress in education and science, one of the key strategic objectives of the vision of the Lithuanian Welfare President – increase the volume of public resources by 35% – is still particularly relevant. GDP level. This requires, above all, a more effective use of instruments to reduce the shadow economy and greater equity in the country’s tax system.