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Saeima conceptually supports next year’s state budget project

Photo: flickr.com/Saeima Chancellery.
On Thursday, 26 October, Latvia’s Saeima support the state budget project for 2018 and accompanying legislative drafts.

56 Saeima deputies voted in favour of next year’s budget project and 39 parliamentarians voted against.

In total, the Saeima reviewed two new legislative drafts and amendments to 26 laws, as well as a legislative draft on content of medium-term budget and the budget project itself.

Proposals for legislative drafts will be allowed to be submitted until 31 October. The government and Saeima commission will review proposals in November. The decision regarding the approval of the state budget will be made at the end of November.

When forming the next year’s budget, politicians decided to drop the so-called deputy quotas. This means there will not be any additional funding for proposals from parliamentarians. Nevertheless, they will be able to submit proposals for more efficient use of funding.

The 2018 budget project’s revenue is planned at EUR 8.75 billion, which is EUR 725.11 million more than the year before. Expenditures are planned at EUR 8.95 billion or EUR 624.82 million more than this year.

Healthcare is declared as budget priority for 2018. Funding for this sector will exceed one billion euros for the first time.

State budget’s base revenue for 2018 is planned at EUR 6.16 billion, whereas expenditures are planned at EUR 6.49 billion. Compared with 2017, state budget’s expenditures will grow by 6.6%.

In regards to EU instruments and other foreign co-financed projects, state funding for them is planned to be cut by EUR 78.4 million.

State special social insurance budget’s revenue and expenditures are planned at EUR 2.77 billion and EUR 2.65 billion respectively. State special budget’s expenditures, when compared with 2017, will grow by EUR 230.4 million or 9.5%.

It is stated in the legislative draft that the volume of subsidies for municipalities will be EUR 350.88 million, including EUR 256,373,650 for teachers’ pay, EUR 65,637,452 for special pre-school education institutions, EUR 27,893,038 for kindergarten teachers’ pay, and EUR 982,457 for creative collectives managers.

State budget grants for municipalities have been set at EUR 57.58 million, including EUR 32,821,803 for municipal financial equalization fund, EUR 21,106,179 for special grants and EUR 657,580 for children in kindergartens and old people in retirement homes.

It is also stated in the legislative draft that personal income tax revenue division between state budget and municipal budgets will be 80% in favour of municipal budgets and 20% for the state budget. Predicted PIT revenue for municipal budgets is estimated at EUR 1.383 billion.

Maximum state debt for the end of 2018 is planned at EUR 10.25 billion. On top of that, the finance minister will be able to provide guarantees on behalf of the state worth EUR 35,956,620 next year. The minister will also be able to write off state loans worth EUR 40,897,907 for liquidated companies or commercial associations.

GDP outlook for 2018 has been set at EUR 28.359 billion. Next year’s allowed general government budget deficit will be 1% of GDP.


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