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August 4, 2021

PM Orban: Additional money for labour, healthcare spending at budget revision. Budget deficit goes up to 4.3 pct of the GDP following budget revision

Prime minister Ludovic Orban told Romania TV private broadcaster on Monday evening that providing additional money to the budget of the Ministry of Labour for the payment of pensions and the earmarking of funds for healthcare spending to keep hospitals and healthcare programmes will be considered for the next budget revision.

“I can tell you that a budget increase is needed at the Ministry of Labour by at least two billion, some of which is money needed to ensure the transfer from the national budget to the pension budget, so that we have all the money needed for the payment of pensions. Of course, other social expenses are included, such as child allowances or other categories of expenses. We also have to increase the amounts for the National Healthcare Insurance House, because the money allocated there is insufficient to fund the running of hospitals and programmes. In the healthcare case, the increase is needed also for achieving compliance with the provisions regarding the settlement of the expenses incurred by employers for health leave, maternity leave and other categories of expenses. About two more billion are needed there,” said Orban.

He also mentioned that between 600 and 800 million lei has to be allocated in order to supplement the incomes of local administration budgets, given that many local administrations no longer have money for running, but also for social assistance expenses.

Asked how serious the budgetary situation is, Orban said the deficit target has been overshot, giving assurances that all financial resources will be allocated so that no Romanian will suffer.

“Obviously, the deficit target is already exceeded in the budget implementation; it is clear that we cannot keep the deficit at the targeted level because that would mean not covering absolutely necessary, indispensable expenses, without which many public institutions and local authorities would not have the financial resources to end the year well. (…) I said very clearly that we will allocate all the financial resources so that no Romanian will suffer. Of course, to be able to secure these amounts, the deficit will widen, but we will own up to the deficit increase, because we have no choice; it is clear that all the amounts that are indispensable in order not to endanger the incomes or the quality of life for many of the most vulnerable categories, all these amounts will be provided at the budget revisions,” said Orban.

He added that Romania’s 2020 national budget will be designed to cut the deficit through increased revenues and better collection.

“We have said in our government programme that we do not introduce new fees and taxes, but a better collection can be achieved, because it seems to me that 25.3% of the GDP – the approximate government revenues – represents a very low percentage in GDP and there is a clear possibility of an increase in the level of collection, by combating tax evasion, especially in areas where it is very large. (…) On the other hand, it is necessary to optimise outlays in order to eliminate unnecessary expenses. (…) There is also a need for efficiency and optimisation of the administration,” said Orban.


Budget deficit goes up to 4.3 pct of the GDP following budget revision


The deficit of the general consolidated budget for 2019 will increase to 4.3 percent of the Gross Domestic Product (GDP) as a result of the second budget revision and the Labour Ministry, the Healthcare Ministry, the Regional Development Ministry, the Finance Ministry and the Business Environment Ministry are among the ministries to receive additional funds.

The Education Ministry, the Interior Ministry and the Transport Ministry are among the institutions whose budget credits had been decreased.

The initial budget deficit target for 2019 stood at 2.76 percent of the GDP.

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