Sofia, June 25 (BTA) - The caretaker Cabinet will draft a
revision of the 2021 State budget and will submit it to the next
 Parliament, Bulgarian Finance Minister Assen Vassilev told
reporters here on Friday after the first meeting of an advisory
board with his Ministry that focused on the effectiveness of
spending of public funds.

Vassilev believes that the budget can be revised without
increasing the deficit.   

The Exchequer is currently overshooting its revenue collection
target, and this excess is likely to reach between 1 billion and
 1.5 billion leva, the Finance Minister said. In recent years
the budget revenues have been increasing by some 7 per cent a
year and the expenditures by 10 per cent. "I believe there is
consensus among the political forces that the effectiveness of
budget expenditures needs to be analyzed and tax compliance
improved. That would balance revenue with expenditure," he
added.

The discussion involved representatives of government
institutions and non-government organizations in the sectors
spending the largest share of public spending: the state
administration, education, healthcare, law enforcement and
pensions, as well as economists and representatives of the
nationally representative employer organizations.   

A budget overview and how it compares with the average EU
parameters were presented at the meeting. "We wanted to see how
many kilometers of motorways have been built and how much this
has cost, and to see the proportion between hospital and
off-hospital services: it is 5:1 in Bulgaria and 1.5:1 in the
EU," the Finance Vassilev said.

On the revenue side of the budget, excise duties increase at
half the speed of the other revenues, he added.

Every year the government sells assets, mostly land, worth 150
million leva, at "inexplicable prices," as he put it.

The Finance Minister argued that a detailed discussion on budget
 policies can only take place when there is a government
enjoying broad parliamentary support.

The caretaker Cabinet, of which Vassilev is a part, was
appointed by the President and was sworn in on May 12, 2021
after the short-lived 45th National Assembly failed to form a
government. It  will be in office until the next Parliament, due
 to be elected on July 11, renders up a regular government.  

Update of pensions in the offing

An update of pensions was also discussed at the meeting. The
Finance Minister said that pensions were last updated in 2008.

The Vice Governor of the National Social Security Institute
(NSSI), Vessela Karaivanova, said that NSSI experts are
currently working to adjust the pensions to a more up-to-date
contributory income.

Pensions now replace 45 per cent of the people's income from
wages (50 per cent for the minimum wage.

Karaivanova recalled that in 2017 the average pension was 345
leva and in 2021 it is 489 leva.

According to Vanya Grigorova, an economic experts with the
Podkrepa Trade Confederation, the gray economy and undeclared
employment are the key reasons why pensions are rarely updated.
It is also why the budget transfers to the NSSI are increasing.
Another reason for having to have budget transfers to the NSSI
for pensions is that a portion of the pension insurance
contributions now goes to private pension funds.

Grigorova argued that it is important to think of ways to
minimize these flaws of the pension insurance system and deal
with the reluctance to bring to light the shadow economy.
"Otherwise we will have to continue to explain, year after year,
 why pensions can't be invcreased," she commented. HV/LN/