Minister wants salaries and pensions cut by 10 percent

Minister wants salaries and pensions cut by 10 percent

“Public sector workforce and pensioners cannot possibly be the ones carrying the largest burden,” he said.

In a statement for the public broadcaster RTS, Vujović said that his proposal, which he described as "a working hypothesis," was to cut both public sector salaries and pensions by ten percent this year.

He explained that this "hypothesis" is yet to be considered by the government, along with other measures meant to bring about economic recovery. The government will then decide if pensions will be reduced, and by how much, Vujović said.

Speaking for Blic, he noted that "the problem does not lie in the choice of measures, but rather in their severity and way in which they will be implemented."

The minister further stated that "the same objective could be achieved with a set of economic measures that the government would implement in the next three years," adding that the issue of deficit would also be tackled by resolving the problems from the past.

“By solving the status of 584 enterprises that spend budgetary funds, without making profit, we will save around EUR 600 million per year. A better administration, thanks to competent management and spending cuts in public enterprises, could bring EUR 200-300 million on an annual basis, instead of losses that are covered by the budget,” Vujović said.

However, he warned that it is necessary to reach a political and social consensus so as to ensure that there are no exceptions in the implementation process.

“No one can be spared,” the minister said, underscoring that “the fight against the gray economy remains a priority” of the Serbian government.

“The Serbian budget loses EUR 100 million every year due to cigarette smuggling. A half of the total quantity of rakija (plum brandy) is produced without paying excise duties and taxes, and these could be budget revenues,” Vujović said.

He also noted that corruption is the plague of the Serbian society, and crime - "he worst form of corruption."

“The consequence of the crime in this country is not only that people lose lives, but also that, due to the unpaid taxes and excise duties, the state loses the revenues with which it could finance schools, hospitals, roads,” the minister stressed.

He said that it is impossible to resolve some problems in the Electric Power Industry of Serbia (EPS) without a price hike, but he warned that the saving of electricity is pointless with the prices 30 percent lower than the lowest in the region.

He added that the EPS also registers technical losses of 18 percent of the produced electricity which are not a result of the price, but rather poor governance, and underlined that a rise of the electricity price is pointless without a responsible management.

“Higher prices will have no effect, and would be used for an increase in salaries, which are already too high. With the average salary of RSD 75,000, EPS employees earn almost two times more than the average worker,” the minister noted.

Vujović said that a review of the budget will take place in September, when a delegation of the International Monetary Fund (IMF) is also due to come to Belgrade.