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More specifics and detailed policies to be found in the Government Program 2005-2009, compared to previous cabinet’s agenda.
submited on 23.11.2005 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
submited on 23.11.2005 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
We can outline three areas of policy that deserve special attention: a promise of balanced budget and contained public expenditure, deregulation of network industries and concessions over infrastructure and (partial) reforms in financing of education and healthcare.
The government sets a target of fiscal burden of 40% of GDP. Tax policy is broadly framed; however, the government is committed to preserve the present top marginal rates on income taxes.
The government promises the creation of at least 240 thousand jobs by the end of the mandate. These will be pursued mostly through pro-active targeted programs and initiatives. Experience proves however that such measures increase employment at the cost of the public financing that covers the difference between newly-created jobs’ wages and actual labor productivity of the newly-employed workers. In this manner these policies should be monitored from a fiscal perspective as a redistributive tool.
The government promises to finalize privatization in energy generation. Additionally, it will foster further restructuring and liberalization of existing monopoly sectors. The concessions of ports and airports will be concluded. The government will start a reform on the water supply sector by attracting private investment.
In education the most important commitment is the plan for gradual reduction of costs related to small schools. The future of “voucher financing” is still vague; most probably, the government will stick to the current system trying to increase effectiveness.
Hospitals will be privatized, while the hospital care will be financed entirely through the National Health Fund. However, there are no guarantees that a fiscal discipline will be maintained, i.e. that hospital (even privately-owned) overspending will not be regularly covered by additional public subsidies.
The government sets a target of fiscal burden of 40% of GDP. Tax policy is broadly framed; however, the government is committed to preserve the present top marginal rates on income taxes.
The government promises the creation of at least 240 thousand jobs by the end of the mandate. These will be pursued mostly through pro-active targeted programs and initiatives. Experience proves however that such measures increase employment at the cost of the public financing that covers the difference between newly-created jobs’ wages and actual labor productivity of the newly-employed workers. In this manner these policies should be monitored from a fiscal perspective as a redistributive tool.
The government promises to finalize privatization in energy generation. Additionally, it will foster further restructuring and liberalization of existing monopoly sectors. The concessions of ports and airports will be concluded. The government will start a reform on the water supply sector by attracting private investment.
In education the most important commitment is the plan for gradual reduction of costs related to small schools. The future of “voucher financing” is still vague; most probably, the government will stick to the current system trying to increase effectiveness.
Hospitals will be privatized, while the hospital care will be financed entirely through the National Health Fund. However, there are no guarantees that a fiscal discipline will be maintained, i.e. that hospital (even privately-owned) overspending will not be regularly covered by additional public subsidies.
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