Government backs amended budget bill with €55m extra spending

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The Lithuanian government on Monday backed the amended 2020 state and municipal budget bill and will now put the proposals before the parliament.

The new bill allocates €10.3 million in additional funding for salaries of education assistance specialists, additional €15.6 million for teachers’ salaries, €4.6 million for lecturers and scientists’ salaries, €11.2 million for salaries of preschool education workers, and €6.4 million for culture and art workers.

Doctors will receive €40 million in additional funding, while firefighters and police officers will receive €4 and €3.5 million in additional funding, respectively.

The budget bill estimates a 0.2 percent GDP government sector surplus, and the public financial reserves should amount to around €1.7 billion at the end of 2020.

The budget bill stipulates that the country’s economy will grow 2.4 percent next year, the average annual inflation will stand at 2.3 percent, and the average monthly salary, excluding taxes, will grow 7.4 percent, and the unemployment level will stand at 5.9 percent.

“Taking into account public expectations and providing more funding to areas that need it the most, we also took into account the changing economic situation and we are sticking to financial discipline,” Finance Minister Vilius Šapoka said.

Following the 2020 state budget’s latest review, expenditure rose €55.3 million and income grew €13.9 million.

The average old-age pension will grow by €30 to €375 euros. The indexation of the basic pension as of July 1 will need an additional €15.9 million.

The state budget will collect €52.2 million in additional revenue from dividends and corporate tax paid by state-owned enterprises, as well as additional €28.7 million in residential income tax, €9.3 million from lottery sales, and €4.5 million from gambling taxes.

According to the finance minister, the government is grappling with a €45.9 million shortfall in projected revenues due to the ongoing debates over taxes on banks and major retailers, which were taken into in the earlier budget proposal.

“The drop in excise duties, compared to the government version, [creates a shortfall of] €20.3 million,” according to Šapoka. Changes to car registration and real estate tax is also creating €9 and €5.6 million gaps in the budget plans, respectively.

Meanwhile, benefits for children with disabilities and from large families on low income will increase by €20 to €90 as of January 1, and all children will get another €10 euros as of July 1.

The decision to delay the raise to July 2020 was necessary because the funding is being increased in other areas, according to Prime Minister Saulius Skvernelis.

“The reality is that all areas lack funding. We focused on what’s most important, and that is single parents with children and disadvantaged families,” the prime minister told journalists when presenting the next year’s budget on Monday.

Skvernelis said decision might still change after the Seimas adopts amendments that would allow increasing revenue.

LRT.LT

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