The budget for 2014 could have been made without enforcing the excise duty of 7 eurocents per litre of fuel, but other measures to compensate the increase of the excise would have been necessary in this case, such as raising the flat tax rate from 16 pc to 18 pc, the delegate minister for Budget Liviu Voinea said yesterday on TV. (…) The excise was part of a bigger package, negotiated with international partners. Replacing the excise, delaying the excise, any such variant must be compensated by another measure. Either with regard to cutting expenses, or with another measures related to incomes. The situation of increasing the deficit is not acceptable,” Liviu Voinea explained, quoted by stirileprotv.ro.
According to the minister, the budget is started from a level of deficit and incomes, then the gap between incomes and expenses must be covered. “The respective gap was exceeding RON 5 bln (…) The increase of the minimum wage brought more cash to the budget, because there are more minimum wages in the private sector than in the public sector,” Voinea added. According to the same source, the measure of increasing the excise by 7 eurocents will bring RON 2.6 bln to the budget. Asked if the money from excise duties will be exclusively allocated to the construction of motorways, Voinea answered that, when conceiving the budget, a particular income cannot be allocated to a particular expense.
“There is a principle in the budget. I cannot provide in a special article that this precise sum will be spent on this precise objective. The law does not allow it. The budget for motorways and national roads is RON 6.2 bln, while the incomes from this tax are half this sum. The CNADNR budget amounted to RON 5 bln in 2013, will advance to RON 6.2 bln in 2014 and is due to increase to RON 7 and 8 bln (…) A bigger chunk than one would enter the budget from this excise will go to motorways, but you may not exactly identify it, the law prohibits it,” Voinea mentioned.
Later, he confirmed that only two motorways will be financed from the state budget next year: Comarnic – Brasov and Suplacu de Barcau – Bors, with a total financing of RON 856 M. Along with these, money will be provided for several ring roads with a motorway regime and some national roads.
Voinea considers as relevant the fact that the National Bank of Romania (BNR) did not change the inflation target for next year after the excise increase was announced, but advises all those interested by the evolution of prices to ask the heads of big oil companies and use the answer in stock exchange speculations.
The budget relies on 2013 collection rate
The construction of the budget cannot take into account an improvement of the tax collection rate and, instead, relies on the collection rate of 2013, and a better performance of incomes for three consecutive months can only be integrated in the budget at the rectification, the Budget minister added.
In relation to supplementing the funds allocated to the Ministry of Development, the minister explained that the sums are smaller than in 2010 and 2011, if one analyses all the comparable budgetary chapters at that moment. The official also reminded that Romania pledged, in the EU Accession Treaty, to secure running water and sewage to 85 percent of its population by 2015, which implies investments made by local authorities. Otherwise, Romania risks paying penalties, he warned. “No budget, anywhere in the world, is perfect and ours is imperfect too, but we did it within the given limits and it is the best budget we were able to do,” Voinea mentioned.
According to the minister, internal consumption has not increased this year because the extra incomes resulting from the restoration of salaries paid to state employees and of pensions was used to repay bank loans, and the banking system did not inject this money into the economy. The delegate minister for Budget disagrees with the predictions made by the head of BNR’s Supervisory Department, Nicolae Cinteza, who recently said that crediting will not resume until the autumn of 2014, as banks are unwilling to take new risks because an analysis of the quality of the assets existing in the system will be made in 2014, followed by a stress test.
“I am confident that, starting with the beginning of 2014, through the new mechanism which the government adopted, i.e. guarantees worth RON 2 bln for SMEs, a big sum, half a million of EUR. The banks will add another RON 2 bln, giving a total RON 4 bln in loans which SMEs can take as working capital,” Voinea explained.
President Basescu claims excise hike, money for European elections
President Basescu said Thursday that in a meeting held at Cotroceni he proposed PM Victor Ponta not to enforce the excise duty increase starting January 1st 2014 and, if the budget runs into deficit, to enact it as of June 1st, but the premier did not accept. The president added that the refusal confirmed him that the premier “wants the money for the European elections.” President Basescu discussed last Tuesday with PM Ponta at Cotroceni, in a meeting also attended by ministers Chitoiu and Voinea and BNR governor Mugur Isarescu.