Budget and social security bills adopted by joint Budget-Finances Committees

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Parliament’s joint Budget-Finances and Banking Committees adopted on Sunday this year’s state budget bill and social security bill, with a majority of votes.

The drafting of this year’s social security budget and unemployment benefits budget took into account the following measures:

  • The hiking of the pension point by 5.25 percent to RON 917.5 starting in January 2017
  • The hiking of the pension point to RON 1,000 starting on 1 July 2017
  • The offering of a correction index of 1.14 starting on 1 January 2017 and of 1.05 starting on 1 July 2017
  • Matching budget expenditures with the fiscal-budgetary framework included in the Government’s Fiscal-Budgetary Strategy 2017-2019
  • The hiking of the gross average salary to RON 3,131 in 2017, up from an estimated RON 2,815 in 2016 and RON 2,555 in 2015
  • Lowering the number of registered unemployed persons by 42,000, to a total number of 387,000 persons at the end of 2017, down from the 429,000 persons estimated at the end of 2016
  • Lowering the unemployment rate from 4.8 percent estimated at the end of 2016 to 4.3 percent at the end of 2017

In 2017, the social security budget’s total expenditures were estimated at RON 56.8 billion, of which RON 56.6 billion for the public pensions system (99.8 percent) and RON 130 million for the labour accidents insurance and occupational diseases insurance system (0.2 percent).

Of the public pensions system’s total expenditures, 98.8 percent will be allocated for social security and 1.2 percent for the operational requirements of the public pensions system (expenditures on personnel, goods and services, interest owed to the state treasury, projects financed with non-reimbursable external grants and non-financial assets).

Of the labour accidents insurance and occupational diseases insurance system’s total expenditures, 91.7 percent will be allocated for social security (pensions for invalidity caused by labour accidents or occupational diseases, social security in case of invalidity), 0.6 percent for health insurance contributions paid for persons on medical leave to the single national health insurance fund, and 7.7 percent for the system’s operational requirements (expenditures on personnel, goods and services, non-financial assets).

The funds for the payment of public pensions total RON 55.01 billion in 2017, namely 6.7 percent of GDP.

An average monthly pension of RON 990.7 was taken into account when establishing the funds needed.

The social security budget features a surplus of RON 281.6 million, representing the financial result of the system of labour accidents insurance and occupational diseases insurance.

According to the same draft, the unemployment benefits budget features total expenditures of RON 1.14 billion, of which RON 1.11 billion related to the unemployment benefits system (97.9 percent) and RON 23.5 million related to the guarantee fund for the payment of salary arrears (2.1 percent).

 

Florin Citu: Liberals did not vote for the budget, forecasts it relies on are far too optimistic

 

PNL Senator Florin Citu pointed out on Sunday, after Parliament’s joint Budget-Finance Committees adopted the state budget bill, that the Liberals did not vote in favour of the bill because the forecasts it relies on are far too optimistic and Romania “is a poor country.”

“The budget is based on PSD’s forecasts, not the National Forecast Commission’s forecasts. A realistic scenario would be obtained if we average out the forecasts of the private sector, of banks or of international financial institutions,” Citu said.

He added: “Several arguments allow us to state that this budget does not back economic growth, it’s built for PSD voters and for those who are less in the know from an economic standpoint. Romania is a poor country, and what PSD is doing is redistributing 100 percent of GDP toward the other 70 percent.” According to the Senator, the draft budget “is hiding the governing platform’s possible failures.”