Budget revision adopted, cuts from Nov. 1

Budget revision adopted, cuts from Nov. 1

Late Sunday, 188 MPs voted for the budget revision, while 10 voted against.

The reduction of salaries over RSD 25,000 will apply to all public sector employees, including direct and indirect beneficiaries of budget funds and public enterprises.

Those with high pensions will take the brunt of the pension cuts through a gradual rate of reduction, while there will be no reduction for 61 percent of pensioners.

The 1,510,000 pensioners who receive under RSD 40,000 will face a reduction amounting to less than 10 percent, while those with more than RSD 40,000 will see their pensions cut by more than 10 percent.

The salary and pension cuts will take effect on November 1.

The adopted budget revision - the law amending the 2014 budget law - will increase the budget deficit by RSD 42 billion to RSD 224.7 billion, which is equivalent to 4.64 percent of GDP.

Budget expenditures will increase from RSD 1.113 billion to RSD 1.122 billion, with revenues reduced from RSD 930 billion to RSD 897 billion.

Serbia's total budget revenues in 2014 will shrink by RSD 32.7 billion, or by 3.5 percent, with tax revenues dropping by RSD 43 billion, or by 5.4 percent, and non-tax revenues increasing by RSD 8 billion, or by 6.5 percent.

Donation-based revenues increased from RSD 2.3 billion to RSD 7.5 billion due to aid received for flood-hit regions.

The total guarantees amount to RSD 66.3 billion, i.e. USD 200 million and EUR 400 million, and the approved projects and program loans will total RSD 615.6 billion.

After the revision, the current expenditures will include RSD 200.9 billion for public sector salaries, which is RSD 6.9 billion less than envisaged in the original 2014 budget.

The total amount of subsidies grew by 15.8 percent to RSD 93.7 billion, with the highest increase (RSD 9.7 billion) for the economy.

Subsidies intended for agriculture will total RSD 34.2 billion, while the funds earmarked for roads and railways will remain the same - RSD 7.7 billion and RSD 13.2 billion, respectively.

Transfers to other levels of government will be raised from RSD 71.9 billion to RSD 74.1 billion.

The 2014 budget is revised based on the assessment that Serbian GDP will drop by 1 percent this year, while the original budget was based on the projected 1 percent increase in GDP.

Along with the budget revision, the MPs also adopted the decision amending the 2014 financial plan of the national pension and disability insurance fund, the decision on changes to the 2014 financial plan of the national health insurance fund, and the decision amending the financial plan of the national employment service.

The decision on changes to the 2014 financial plan of the military social insurance fund was also adopted.

Parliament passed the law on temporary calculation and payment of salaries and other regular payments to budget beneficiaries, the law on temporary regulation of pension payments, and changes to the law on the central register of mandatory social insurance.