The state budget bill for 2018 has been adopted by articles on Monday by the plenary sitting of Parliament.
The bill has been adopted in its form provided by the budget committees, with one single amendment rejected.
Therefore, the Parliament plenum rejected the amendment regarding the increase from 71.5% up to 100% of the split quotas for the income tax to be transferred to the local budget, in order to compensate for the cut in the income tax from 16% down to 10%.
The one who proposed that this amendment should be rejected was the Social Democrat Deputies leader Ionut Munteanu, after the amendment had been previously approved by the budget-finances committees. The MPs rejected the amendment initiated by the UDMR, with 105 votes “in favour”, 114 “against” and one abstention.
Therefore, the Parliament adopted the initial text of the budget draft, according to which the quotas for the income tax split transferred to the local budgets stay at 71.5%.
The final vote on this law will be cast this week.
PM Tudose: It’s a budget of investments, this is the vision on prosperity and performance
On Monday, Premier Mihai Tudose asked parliamentarians to vote in favour of the state budget for 2018, deeming it “a project of development, of investments following a good year for our country, the year 2017,” and calling it the vision on what prosperity and performance means.
The Premier emphasized in the joint plenary sitting of the Parliament that the budget for 2018 is a development budget, adding that it is the most generous investment budget Romania has ever had since 1989.
“Despite all critics, the 2018 budget is a development budget, an investment budget, after a good year for our country, the year 2017, and the figures have spoken and will speak further,” the Premier stated, at the presentation of the bill on next year’s budget.
The Prime Minister listed several measures taken by the Government in 2017 in the healthcare and education sectors.
“As regards the healthcare sector, we start from upgrading and extending 17 public hospitals, the allocation of RON 100 million in medical gear for 22 hospitals, the granting of EUR 66 million for utilities in the emergency units, the endowment of the ambulatory equipment worth EUR 230 million, the purchase of 272 of anaesthesia machines for the operating blocks in 50 sanitary units. (…) In education, 2017 was the first year when the children have had the text books in time. Moreover, to solve the problem, the Handbook Law was approved in the Government sitting, the construction of 46 kindergartens was financed, 24 schools, significant progress in the dual tuition is made, the “Romania hires” programme was launched, worth EUR 550 million,” Tudose said.
He stressed that the budget bill observes the Maastricht Treaty criteria as regards the compliance with the 3pct deficit of the GDP and a public debt smaller than 60pct of the GDP. The ESA estimated deficit is 2.96pct, whilst the public debt is parked at 37.6pct of the GDP, which situates us on 5th place as the smallest debt to GDP ratio,” Tudose added.
The Head of Government said that Romania will observe, in 2018 too, the commitments to its strategic partners, towards the NATO with 2pct of GDP for the Defence sector.
“We preferred to be cautious, to relate to a 5.5pct increase even though it has reached 7pct at nine months, according to the INS data,” he added.
“This is the Government of Romania’s vision about what means a responsible state towards its citizens. This is the vision about what prosperity and performance means. I trust we’ll make it. We will increase competitiveness not only to grow the living standard, but also to exceed in competitiveness certain regional countries,” Tudose stressed.
The premier told the MPs to back the budget bill for 2018 because it is the most generous investment budget.
” Had faith in economy, especially when horsemen of Apocalypse herald our doom”
Premier Mihai Tudose stated on Monday that the budget vision he presented in Parliament is not new, affirming that “I had faith in the economy, especially when all sorts of horsemen of the Apocalypse were huddling to herald our doom.”
“The budget vision that I presented in Parliament now is not new, I introduced it in 2016, based on this vision we won the elections. We enforced it this year and we will continue to apply it in the coming years as well. We committed ourselves to obtaining over 5 percent economic growth that would be found in Romanians’ daily lives, in the purchasing power, in the rise of the living standard for Romanians. At the end of the year we have a 7 percent economic growth, the average purchasing power of the employees has increased by 11 percent and that of pensioners by 12 percent just in the first ten months of the current year. This year I trusted completely the economy, especially when all sorts of horsemen of the apocalypse were huddling to herald our doom. Starting with August, as you know, it was being preached that we no longer have money for salaries, we don’t have money for pensions, that we are shutting down the country. Results prove us that we were the ones who were right,” Tudose told the reunited Parliament plenary sitting at the debate on the 2018 state budget law.
He added the results he recalled are confirmed by official data from the National Institute of Statistics (INS), from international financial institutions, IMF, the World Bank.
“The truth is only one: Romania has won, and all those who, from incompetence or hatred, have preached the worst for Romania ha objectives we have set for ourselves,” Prime Minister Tudose specified.
Vilceanu: PNL won’t vote the budget for 2018
PNL will not vote the state budget for 2018, PNL Vice President Dan Vilceanu stated on Monday at the plenary meeting, pointing out that the budget is a budget of underdevelopment and poverty. At the start of his speech, the Liberal demanded that Premier Mihai Tudose be brought back “from his cigarette break” in order to listen to the debates.
“PNL will not vote the budget for 2018, because, apart from the fact that it breaks the Constitution and the law of treaties, it is a budget of poverty and underdevelopment. During the campaign you were at least good at lying, now you’ve lost this talent too,” PNL Vice President Dan Vilceanu stated at the plenary meeting, during the debates on the budget bill for 2018.
The Liberal stated that the budget for 2018 does not raise pensions or salaries, blocks employments in the public sector and cuts public sector expenditures.
“I want to tell you from the start that we are talking about an austerity budget,” the PNL Vice President said.
Vilceanu stated that the “most aggressive attack” is on the budgets of local authorities.
“A tax cut is plainly written in the draft budget. Mr Prime Minister you met the mayors and assured them they will not suffer from this standpoint. (…) With the draft budget, you have shown us that you lied. (…) If Mr Dragnea were a county council chairman, how would he have viewed this measure?” Vilceanu said.
At the start of his speech, the Liberal asked that Premier Mihai Tudose be brought back “from his cigarette break.”
“I would like you to send someone to get the Prime Minister back at the debates on the budget. Someone should take him away from his cigarette break, should bring him at the debate,” Dan Vilceanu said, his demand being followed by his colleagues’ applauses.
“You’re wasting your own time,” meeting chairman Calin Popescu Tariceanu retorted.
Shortly thereafter, the Liberal thanked the Premier for returning to the debates.
“Mr Prime Minister, I’m glad you have returned,” Vilceanu said.
Nasui: USR will not vote budget for 2018; Expenditures on salaries, similar to those in 2008
The Save Romania Union (USR) will not vote the budget for 2018, USR House member Claudiu Nasui stated on Monday, adding that the budget renders the economy fragile and pointing out that as a percentage of GDP the expenditures on salaries in 2018 will be similar to those registered in 2008, while the revenues will be smaller.
“Not any economic growth is good. The economic growth based on consumption, which undermines the capital structure of an economy, is not good. I remind you we previously had periods of glory, featuring extraordinary growth, which ended horribly and the politicians who were responsible for that still hold leading offices within the Romanian state,” Claudiu Nasui stated.
Claudiu Nasui stated that the expenditures on salaries in 2018 will be similar to those registered in 2008, expressed as percentage of GDP, while tax revenues will be smaller.
“We are heading toward a new crisis, a new moment that you will all regret,” Nasui stated, adding that even though the Premier states that the budget respects international treaties, the European Commission has issued notifications, “procedures of significant deviation for the structural budget.”
USR will not vote the budget for 2018, Nasui said.
“You’ve built a budget that renders us fragile. USR will not vote this budget because it is built childishly, and it renders public investments ridiculous, and it insists on some populist expenditures on pensions and salaries, which will be financed from loans,” Nasui concluded.
Basescu: The budget is risky, it pushes us away from fulfilling Euro Area accession criteria
Popular Movement Party (PMP) Senator Traian Basescu stated on Monday that the state budget for 2018 is fundamentally wrong, being risky, the bill pushing Romania farther away from the moment of meeting the Euro Area accession criteria.
“It’s a budget that uses the Maastricht criteria as benchmark. That’s wrong. From the standpoint of the budget deficit, the Maastricht criteria are outdated since 2010, when the European Council proposed the Fiscal Treaty, which Romania has ratified. The major post-crisis objective in the EU has been the reduction of public debt. This budget, like the one for 2017, hikes public debt. (…) The 2018 budget pushes us away from the moment of meeting the Euro accession criteria, and our absence from the Eurozone only serves to place us in the category of peripheral countries, where decisions are not taken but received from the hard core. I consider that politically we are making a major mistake by not trying to position ourselves within the framework of the Fiscal Treaty,” PMP Senator Traian Basescu stated.
He added that it is difficult to understand that a Fiscal Code that allowed an annual growth of 7 percent is being drastically modified.
“It would have been very good had the Government decided to postpone by a year the introduction of the new measures. We needed a year of calm after the inflationary shocks of 2017. The budget is risky. The major tax cuts only serve to place us in a situation of hazard with the budget. I would like to point out that the split-VAT is one of the errors that the Government and administration won’t be able to handle,” Basescu added, pointing out that PMP will not vote the budget.
The joint plenum rejected the increase in income tax rates that go to the local budgets . PNL’s Roman: PSD-ALDE gave the heaviest blow to mayors
The joint plenum of the Parliament rejected on Monday the amendment adopted on Friday by the Budget-Finance Committees on the increase in income tax breakdowns that go to the local budgets. PNL Vice Chair Florin Roman says that the decision is a blow that PSD gave to the mayors and claims the “meed” gave to UDMR, a party that actually “decides everything” in the Parliament.
The Budget-Finance Committees adopted on Friday an amendment providing that: “In 2018, by way of derogation from the provisions of the art. 32 and art.33 of the Law no.273/2006 on the local public finances, as subsequently amended and supplemented, the income tax expected to be collected to the state budget, except the pension income tax, will be allocated to each administrative-territorial unit, as follows: a) 18% to the local budget of the county; b) 66.8% to the local budgets of the communes, cities and municipalities on whose territory the income tax payers are operating; c) 15.2% in a separate account, opened at the treasury of the county seat of the county on behalf of the Regional General Directorate of Public Finance / of the county public Finance Administration”.
The amendment was filed by the PSD Senator Eugen Teodorovici, by PNL, USR, PMP and UDMR, but it was rejected on Monday by the plenum of the Parliament with 105 pros and 119 cons.
PNL Vice Chair Florin Roman criticized the decision of the PSD-ALDE coalition to reject the amendment, saying that it is “the heaviest blow” taken by the local representatives.
“Today, the PSD-ALDE majority gave the heaviest blow of the last 27 years to the local representatives, namely the mayors and the presidents of the county councils. By the today’s rejection vote on the amendment adopted by the Budget-Finance Committee, all the important investments in Romania are actually stopped. We must admit, if anything has been done in this country, it has been done at the local level first. There was water supply there, there were sewage works, county road works, communal road works, municipal roads, school modernization, hospitals, dispensaries. All these things have been done by the mayor”, the PNL MP said.
Roman also said that the PSD-ALDE majority gave RON 40 million to UDMR to “play their games”, but the decision is not for the benefit of any mayor.
“Today, by this amendment, the PSD-ALDE majority, which also paid a meed of around RON 40 million, according to the amendments, to UDMR, which made its move again, unfortunately, to the detriment of the mayors. Actually, all the important investments at the local level are stopped. Today, they voted against them (against the mayors – e.n.), they voted to sanction the mayors who are hardworking” Roman added.
Asked where the RON 40 million gave by PSD-ALDE to UDMR will go, he said that they will be used for the investments in the Mures and Covasna counties.
“The RON 40 million proposed as amendments are dedicated to the Targu Mures Airport, to works in the Mures and Covasna counties, there are several infrastructure works. It’s not their fault, but 3,200 mayors in Romania are punished by this vote” Roman claimed.
He also said that PSD-ALDE couldn’t adopt any organic law without UDMR’s help. “No. They are currently running the Parliament, because PSD and ALDE no longer have the necessary number of votes for the organic laws, such as the Laws on Justice. They gathered 140, or 150 votes at most. Without UDMR’s votes, nothing is actually adopted by the Parliament, in terms of the organic laws. Organic laws are the ones that PSD is interested in. Therefore, UDMR is the one who currently decides in the Romanian Parliament”, the MP concluded.