Dramatic Lack of Workers Threatens Economy

Total Croatia News

ZAGREB, September 20, 2018 – The Croatian Employers Association (HUP) warned on Thursday that the lack of labour on the labour market was dramatic and that the measures the government was proposing would not solve the main problem – high operating costs.

Calling on the government to accept HUP’s proposal to expand the range of non-taxable incomes of workers, HUP leader Gordana Deranja said that the situation in the business sector was dramatic but that that was not being recognised and that the laws the government was working on would not help change anything.

She said that HUP did not call today’s news conference by accident but because the government was forwarding a set of changes to the tax system to the parliament today.

Deranja went on to say that the economy was inevitably sinking due to a chronic lack of labour and that she believed Croatia had hit rock bottom. “Maybe the situation in Zagreb is not so dramatic, but HUP has been receiving dramatic appeals from all over the country to do something. The amount of work to be done has never been bigger but we do not have workers to do it,” she said.

She said that HUP’s earlier appeals for quotas for the import of workers had been ignored while now, after the government had introduced those quotas, “nobody wants to work here.” “Who in their right mind would want to come to work in Croatia when people here are leaving the country?” she said.

Deranja said that the proposed reforms were not really reforms, but only certain changes that would not result in keeping the workforce in the country or increasing their wages. She said that it was high time the government started treating HUP as a partner wishing society well. “Let us help employers keep good workers and pay them decently, so that we can produce and export,” she said.

She noted that Croatia did not have a labour market and in that context noted that no one was applying for job vacancies. There is also no coordination between the education system and the labour market, she added.

Commenting on the pension reform, Deranja said that nobody was raising the question of the amount of pension allowances and whether pensioners could live on their current pensions.

HUP general director Davor Majetić said that HUP supported going into retirement at the age of 67 but that that age should not apply to all workers as there were jobs where people needed to retire earlier.

People should be encouraged to stay on the labour market instead of increasing penalties for early retirement, Majetić said, noting that the second pension pillar should be maintained.

As for the government’s tax reform, to be presented later in the day, Majetić said the proposed measures were so inefficient that they would not help remove the main problem – high operating costs. “Without lower operating costs we will be losing the workforce, companies will be losing contracts and clients, and that could result in bankruptcies,” said Majetić.

Last week HUP put forward its own tax reform proposal but today it focused on the expansion of non-taxable incomes such as the 13th wage, rewards, per diems, hot meal and transport allowances.

Majetić noted that those measures could help reduce operating costs without affecting the state budget. He also called for reducing, already this year, para-fiscal levies in the amount of 1.5 billion kuna, a measure announced by Economy Minister Darko Horvat for next year.

The head of the HUP Metal Industry Association, Franjo Turek, said that quotas for the import of foreign workers were inadequate, unproductive and were not yielding results. The government’s decisions in that regard must be sensible, rational and fast, he said, adding that the labour market should be opened and liberalised and that employers should be allowed to help themselves on their own.

The head of HUP’s office in Varaždin, Tihomir Premužak, said that the situation in northwestern Croatia, where the manufacturing industry had a significant role, was hampered by the closeness of the Slovenian and Austrian border, because companies in Slovenia and Austria offered workers wages which Croatian employers could not offer them.

He noted that the manufacturing industry was already faced with a retirement wave, which would escalate in the next five to ten years, and warned that there would be no one left to hire then, because such jobs were mostly unattractive to young people.


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