Expenditures are set to exceed RON 100 bln. Health Ministry affected by steepest cuts, by 40 per cent followed by MoD with 30 pc lesser budget. Transportation, Agriculture and Finance Ministry will have higher budgets.
The state budget draft law published by the Ministry of Public Finances (MFP) on Sunday estimates budget revenues of RON 80.8 bln and expenditures of RON 108.4 bln in 2011. The largest revenue hike is estimated to come from “other taxes on income, profit and capital earnings,” namely 380 per cent compared to 2010. Expenditures on leadership indemnities will drop by approximately 40 per cent, while those on “other bonuses” will drop by 30 per cent, according to the draft law published on MFP website.
Likewise, revenues from the tax on incomes obtained from independent activities will grow by 1 per cent in 2011, while those from the tax on copyright incomes will grow by 0.29 per cent. Insurance contributions will grow by 1.5 per cent. The sums received from the UE or other donors will grow by 79.38 per cent. At the same time, “the revenues obtained in the process of settling debts owed to the budget in the form of taxes, contributions and fines” will register a drop of almost 100 per cent, just as will happen in the case of “revenues obtained on the occasion of taking part in actions under the aegis of international organizations.”
Expenditures on loans will drop by approximately 100 per cent. The state’s expenditures on “social insurance contributions” will grow by 127 per cent. When it comes to goods and services, expenditures on fuels and lubricants will grow by 68 per cent, while those on disinfectants will grow by 134 per cent. “Life insurance bonuses paid by the employer for employees” will grow by 72 per cent. The same document shows that the intervention fund that is at the government’s disposal will grow by 536 per cent.
In what concerns projects financed from European funds, “in 2011 the main credit managers of local budgets will take priority in financing those investments that have to do with projects financed from external non-reimbursable funds.”
There is however a winner among all budget cuts – the Presidential Palace. The funds earmarked in 2011 for the Presidential Administration are RON 1 M higher than the ones earmarked this year, growing from RON 28.26 M to RON 29.27 M. The budget hike will go into goods and services, meaning that more money will be spent on the President’s and his staff’s travels and also on the acquisition of vehicles, Antena 3 reports.
In other developments, the Presidential Administration announced that the Romanian President’s official flights will be handled by an A319 Airbus owned by TAROM, since Romavia, the airline that used to handle the President’s flights, has announced that it can no longer do so given the financial situation, Agerpres informs.
The most dramatic cut will affect the Health Ministry, the earmarked sums set to drop by approximately 40 per cent from RON 7.14 bln this year to RON 4.4 bln. Romania has the lowest health budget in the EU with some 3 pc of the GDP until 2010, as against 8 per cent the European average.
The Ministry of National Defence (MoD) will receive RON 4.7 bln, 30 per cent less compared to the RON 6.7 bln it received in 2010. The government established that the Labour Ministry’s budget will grow from RON 29.4 bln to RON 33.6 bln. The Agriculture Minister will have a budget of RON 11.6 bln, RON 1.4 bln higher compared to this year, while the Environment Ministry’s budget will grow by RON 500 M from this year’s level of RON 1.8 bln. The Finance Ministry’s expenditures will grow by RON 300 M from RON 2.5 bln to RON 2.8 bln, while the Transport Ministry’s budget will grow slightly from RON 11.538 bln to RON 11.574 bln. In 2011 the social insurances budget will receive subsidies of RON 13.94 bln (approximately EUR 3.25 bln), up by 28 per cent compared to 2010. Public Finance Minister Gheorghe Ialomitianu stated on Saturday in Bistrita that the country’s financial-budgetary outlook for 2011 is good, provided it continues to have a prudent policy.