Salary increase proposed by G.Nausėda: does the state have money for that?

According to Professor R. Lazutka, people with lower incomes would feel the increase in NPD.

According to him, the wages of this population group fell significantly during the pandemic.

“Those who earn very low wages will benefit from 10 euros (per month – 15 minutes). That is not enough, but since the income of those people is very low, it is certainly necessary to support their growth.

Statistics from last year showed that with wages growing around 10%, top wages grew twice as fast, while low wages remained virtually unchanged. And during the pandemic, in the spring of last year, it was even reduced by 20 to 25 percent. Those people need help with the NPD, ”said the economist.

He assured that increasing the NPD will affect several hundred thousand people.

According to Simon Krėpšta, the president’s senior adviser, there are currently 290,000. working people with less than € 560 per month.

According to R. Lazutka, increasing the NPD can also be significant in terms of increasing the minimum wage.

The president is committed electionism?

Political scientist V. Valentinavičius critically assesses G. Nausėda’s proposal to increase the NPD.

In this way, it seeks to collect political points, regardless of the consequences that arise.

“Politically, their objectives are clear enough: to prepare for the elections and the second term. And it is possible to make clear inferences that people may not delve into the future consequences of such initiatives.

People will be happy with the € 10 that they have contributed to the salary, and they will not really think about how much social services will be lost as a result of the lower tax collection.

It’s an unspoken soulmate agreement that will happen.

(…) I am not constantly surprised by the march towards the welfare state declared by G. Nausėda and the concrete steps that, in principle, overturn the fiscal bases for the creation of the welfare state. Any proposal to reduce taxes without adding a part of what could be used to build a welfare state, in my opinion, is simply electionism“Said University associate professor Mykolas Romeris.

Professor R. Lazutka from Vilnius University agreed that the presidency should clearly communicate the means by which the costs arising from the NPD will be covered.

“If we reimburse those who earn low, it would be great to propose a correction that would increase state revenue, taxing high income a little more. And then that change would be neutral from a budget point of view, “he said.

R. Lazutka also expressed surprise that the proposal in the Seimas was unanimously supported, although individual politicians did not avoid criticism.

Among them is Prime Minister Ingrida Šimonytė.

According to her, the reduction of NPD could be considered in the coming years:

“With next year’s budget, next year’s indicators, next year’s minimum monthly wage (MMA) and other decisions that will be made next year. Now, I think this decision is not necessary,” the Thursday.

R.Lazutka guessed that G.Nausėda’s proposal will be adopted at the Seimas after deliberations.

V. Valentineinavičius also agreed with that. According to him, the members of the Seimas will also take the opportunity to show off to the voters.

“This proposal is likely to be approved in the Seimas. And it will go through the same benefits that the president sees for himself. All Seimas members see the same benefits personally. This is an unspoken soul mate agreement that will be carried out, “said V. Valentinavičius.

Possible source of funds: from the builder ID

According to S. Krėpšta, the president’s senior adviser, increasing the NPD to the budget could cost up to 80 million. euros.

The amendment could take effect on July 1 and apply retroactively to that entire year.

“The direct impact on the budget deficit is 40 million. up to 80 million depending on how people use this benefit, as it will take effect on the first of July, but it is valid for the whole year and is about two hundredths of this year’s deficit, “S. Krėpšta told reporters on Monday .

According to him, the financial burden of the offer is not high, it could be offset by the approval of the builder’s identification card.

“Currently, it is important to focus not on taxes, but on shadow reduction measures, and we have a lot of unused reservations in Lithuania on this issue.

One such tool is Builders ID, which could digitize the construction business and significantly reduce shadow. By activating such a measure, the benefits would be several times higher than the cost of increasing the NPD, ”said G. Nausėda’s senior advisor.