State budget revenues in the first half of 2018 are 12 pct higher than in the similar period of the year before, Premier Viorica Dancila said on Monday, as she presented the government’s six-month stocktaking report at the Victoria Palace.
“Total budget revenues: H1 2017 – 117.2 bln lei; H1 2018 – 132 bln lei. A 12 percent increase is noticeable in state budget revenues as of mid-2018 compared to the same period of 2017. Thus, almost 15 billion lei more entered state coffers in the first semester of the current year compared to the year before. This represents a monthly increase of 2.5 bln lei or 530 million euro. This surplus was spent to support growth in the population’s incomes and higher public investment,” Dancila said.
The Premier also gave a breakdown of the revenues, in a comparative presentation of income tax revenues and social contribution revenues.
“This is where the effects of the tax reform are best visible. On the one hand, income tax revenues have dropped from 14.8 billion lei in H1 2017 to 11.7 billion lei in H1 2018. This is due to the tax cut from 16 pct to 10 pct. Therefore it was natural to have this decrease of 3.1 billion lei. On the other hand, the transfer of the contributions from employer to the employee has funneled an extra 12.6 billion lei into the state coffers, [as figures increased] from 34.2 billion lei in the first semester of 2017 to 46.8 billion lei in the first semester of 2018. We thus have a 36.8 percent surplus compared to the previous year. Adding the surplus of 12.6 billion lei from social contributions to the minus of 3.1 [billion lei] from the income tax results in a net gain of 9.5 billion lei, and neither the employees nor the employers are affected,” Dancila explained.
She also mentioned the narrowing of the pension budget deficit. “H1 2017 – 6.3 bln lei; H1 2018 – 3.2 bln lei. We thus have 3.1 billion lei more available in the state budget,” the Premier added.
The head of the government also referred to the situation of EU funding to Romania.
“For comparison we also added the first semester of 2016, in order to address accusations that we do not attract enough European funds. (…) H1 2016 – 0.68 billion lei; H1 2017 – 5.6 billion lei; H1 2018 – 6.8 billion lei. We have an increase of 19.7 percent compared to last year, but a 10-fold difference to the first half of 2016. The differences are equally well visible if we compare the absorption percentages, with the mention that these are just mid-year figures for 2018. December 2016: a 7 percent absorption rate of European funds, Romania was trailing behind in the EU. We succeeded in unlocking the EU programs and in partially recovering the gap, so that in December 2017 the absorption rate of European funds was 16 percent and in June 2018 it was 19 percent compared to 20 percent the European average. For the end of this year we target a rate of 25 percent,” said Dancila.
The Premier also gave details about public investment.
“If we look at the chart, public investments amounted to 6 billion lei in the first half of 2017. In the first half of 2018 public investments stood at 9.1 billion lei. (…) Public investments increased by more than half the amount of last year,” she said.
Speaking of foreign direct investments, the Prime Minister stressed that investors were not “impressed by the fake, alarmist” messages released by the critics of the government.
“Foreign direct investment shows us that fortunately investors are unimpressed by the fake and alarmist news released by government critics. We have also added the year 2016 here because I would like to bring to mind past allegations that investors will quit if we raise the minimum wage as provided for in the governing program. But let us look at the figures: H1 2016 – 1.33 billion euro; H1 2017 – 1.93 billion euro; H1 2018 – 2.21 billion euro. Here we see that not only didn’t investors leave, but quite the contrary, they came and confidently invested in Romania,” the Prime Minister underscored.
“One of most important measures, 10 pct increase of pension point”
One of the most important social measures taken by the government was the 10 pct increase of the pension point as of 1 July, reaching 1,100 lei (from 1,000 lei, ed. n.), Prime Minister Viorica Dancila said on Monday afternoon at the Victoria Palace while presenting her Cabinet’s 6-month stocktaking report, adding that in 2019 the pension point will augment by 15pct, parking at 1,265 lei.
“As for the social measures, we have respected our promise to increase the minimum pension guaranteed according to our ruling programme, from 520 lei to 640 lei, hence a 23pct increase. The minimum pension guaranteed has also grown by 60pct, from 400 lei to 640 lei,” Dancila specified.
The PM also stressed that a particularly significant measure as regards the pensioners is the increase of the revenue ceiling for those who can benefit from compensated medicines by 90 pct.
The Prime Minister maintained that the allowance for the persons with disabilities has also increased from 52 euro, in 2016 to 108 euro in July 2018.
She also mentioned the measures taken to encourage work, stressing that the unemployment has diminished and that the Gov’t’s target is to curb unemployment to 3 pct by 2020.
Gov’t increased healthcare, education salaries
Prime Minister Viorica Dancila said on Monday, at the six-month stocktaking report, that the Executive has increased healthcare and education salaries, adding that the incomes of doctors are beginning to be comparable to those in the European Union.
“In the field of healthcare, certainly the most important measure has been the steady increase in the salaries of doctors. (…) Increases are much higher than 100pct. This Government is certainly the only one that has achieved such high rises of the income of those who ensure our health and save our life.
If we add the other bonuses and pay for on-call duty, we can say that Romanian doctors’ incomes start to be comparable to those in the EU. Thus, the exodus of the young doctors has been largely stopped and we have more and more signals regarding the return to the country of those who left,” Dancila said.
She mentioned that the Executive also considered the endowment of hospitals with state-of-the-art equipment.
“Having well-trained doctors is in vain if they do not have modern equipment to establish a correct diagnosis or to do medical interventions. Practically, in H1 2018 we purchased 16 CT scanners, 24 magnetic resonance imaging units, 8 cervical cancer screening units, 21 medical imaging storage systems and 51 pieces of intensive care equipment. They are purchased and are to be installed,” Dancila said.
As to the field of education, the prime minister said that in one and a half year, the teachers’ incomes increased by some 40pct.
Viorica Dancila said that there were cases where salaries increased by 23pct – 25pct, mentioning that these increases are added to the successive pay rises that took place last year after the current coalition came to power.
“In fact, in a year and a half, the teachers’ net incomes rose by about 40pct,” Dancila said.
The prime minister also presented the investments in the field of education.
“As far as education infrastructure is concerned, we have presented the objectives completed in H1 2018: 145 modernized education units and 45 daycares and kindergartens built from ground up. Many others will be finished this year,” the prime minister said.
“We have kept our promise to farmers, subsidies paid on time”
The Social Democratic Party (PSD) – Alliance of Liberals and Democrats (ALDE) governing has kept its promise of granting subsidies in agriculture on time, in the first semester of 2018, the subsidies paid to Romanian farmers amounting to 1.7 billion euro, Prime Minister Viorica Dancila said on Monday, as she presented the government’s six-month stocktaking report at the Victoria Palace.
Rebuilding the irrigation system is one of the most important projects in agriculture, said the Prime Minister. “We promised, during the campaign, that we will reach an irrigated area of 2 million hectares until 2020. Now, after an year and a half, we have reached 1.2 million hectares,” Dancila mentioned.
She also talked about the governing programme for the wool collection.
“Before the current PSD-ALDE coalition came to government, approximately 70 percent of the wool produced in Romania was burned, because there were no exploitation and collection centers. This semester, there are 32,328 sheep herders that are enlisted in this programme, which grants 1 leu for each kilogram of collected wool. Thus, as many as 8,865 tons of wool were collected, of which 3,444 tons were exported. In the pig farming sector, this Government has conducted the first concrete rescue action of two purebred species of pigs, which are highly appreciated by consumers, namely Bazna and Mangalita,” premier Dancila mentioned.
The Prime Minister also reviewed the implementation stage of the anti-hail programme, saying that “we currently have over 60 launch points for anti-hail missiles, of which 26 were made in the first semester of 2017. In total, presently, there are over 870,000 of protected acres against hail. Until March 2019 another 63 launch points will be finished”, she showed.
Viorica Dancila also reviewed the “Tomatoes from Romanian farms” programme.
“I remind you of the 2016 situation which determined us to introduce this programme. We then had roughly 50,000 tons of imported tomatoes, while we exported only 3,000 tons. Today, after implementing this programme, we have managed to produce in Romania 65,544 tons and we will reach 90,000 by the end of the year, nearly double the amount of imports,” the Prime Minister declared.