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BNS: Real budget revision most likely in November, current one just window dressing

Budget

The real budget revision will be probably carried out in November, considering the evolution of certain spending categories, the National Trade Union Bloc (BNS) said in a statement; the union organization cautions that shifting the budgetary pressure to the last two months of the year means an unjustified postponement that is dangerous for budgetary stability. 

According to BNS, the government has gone for window dressing in the current budget revision, the real goals of which are to increase appropriations to local budgets, especially of those for balancing the budgets of local communities; covering by transfer the already existing deficits at the social security budget and the Single National Health Insurance Fund, thus ensuring the resources for the increase of pensions this September; and keeping the deficit within relatively controllable limits. 

BNS said that the budget revision approved on Monday at the government meeting ushers in the reduction of subsidies, capital expenditures, investment financing, allocations for the co-financing of European projects, "everything in order to cover the social support commitments, increase the debt service and transfers for local authorities." 

The unionists consider that in the past five years "we have witnessed the promotion, by the governments, of truly hazardous tax policy measures". 

"Reducing the fiscal burden for the business milieu, while waiting for a significant broadening of the tax base that never occurred, or applying experimental measures designed in the 'abstruse' laboratories of the policy makers are just a few examples in this regard. The result can be seen in the evolution of the tax revenues to the consolidated general budget. Whereas in the first half of 2015 the tax revenues to the general consolidated budget represented 9.9 percent of GDP, in the first half of 2019 they barely reach 7 percent of GDP. Similarly, the current revenues have shrunk from 15.1 pct of GDP in the first half of 2015 to 13.6 percent of GDP in the first half of 2019. Although the composition of the tax authority's management team has undergone numerous changes, the results remained the same. Apparently some hidden resorts are significantly limiting ANAF's ability to collect additional revenues by reducing tax evasion. In many cases, the measures initiated to this effect are being reluctantly promoted and sometimes in a manner that prevents putting them to use," BNS notes. 

In the opinion of the National Trade Union Bloc, "the fanciful innovations regarding tax policy could still produce surprises in the next period". 

A first misevaluation of the effects of OUG No. 79/2017 regarding the transfer of social contributions from the employer to the employee was visible at the approval of the Law on the 2019 social security budget. 

BNS cites as the most recent example the situation in the construction sector, where, according to the unionists, the real effect was far from the estimated one. Thus, in May 2019 the gross average wage in construction was just 19 percent higher compared to May 2018, while the increase of the minimum wage in the sector was 44 percent. 

After 6 months of budget execution, state budget revenues had been achieved to an extent of 43.1 percent, while expenses had been achieved in proportion of 44.4 percent. 

In this context, the National Trade Union Bloc cautions that any modification of the social security contribution's calculation basis, as the one promoted by the Finance Ministry through the withdrawn draft government ordinance, is directly supported by the employees, resulting in the diminution of their net incomes.

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