Minister: Public sector workers need more money for suits

The reason pensions will be cut more than public sector salaries is that those currently employed "have higher expenses," says Finance Minister Dušan Vujović.

Source: B92, Beta

One such expense is "buying suits for work."

Vujović was addressing MPs on Friday presenting the government's budget revision proposal, when he made the statement.

He reiterated that both salaries and pensions currently lower than RSD 25,000 (EUR 210) will not be reduced.

The Serbian parliament today started to debate the draft that would increase the budget deficit by RSD 42 billion to RSD 224.7 billion - 4.64 percent of GDP.

If the bill is adopted, Serbia's budget spending will be increased from RSD 1.113 to 1.122 billion, and revenues cut from RSD 930 to 897 million.

The revision was prepared based on estimates that Serbia would have a one percent reduction of GDP in 2014, whereas the original budget counted on a one percent rise.

Previously, the Beta news agency reported that the Serbian government fixed cuts to public sector wages and pensions until the end of 2017 as a measure for the stabilization and long-term sustainability of public finance. This measure will come in effect on November 1.

The linear cuts to public sector wages at a rate of ten percent are laid down by the bill that sets the temporary base for calculating and paying wages, salaries and other regular income to beneficiaries of public funds, which, together with the draft budget rebalance, are on the Serbian parliament's agenda on Oct. 24.

It has been proposed that the wages of the employees of direct and indirect budget beneficiaries, compulsory social insurance organizations, local governments, public enterprises, majority-owned companies, public agencies and the National Bank of Serbia be lowered. Besides wages, their other regular income that is greater than RSD 25,000 will also be lowered at a rate of ten percent.

According to Serbian Ministry of Finance calculations, the cuts to public sector wages over the next three years will yield savings of RSD 60 billion, which is 1.5 percent of GDP.

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