Possible bad news for employees in the public sector in Croatia
Finance Minister Zdravko Marić said on MArch 4, 2016, that the government is preparing 220 tenders worth up to three billion euros for infrastructure and other projects. “The idea is to announce the 220 tenders for the years to come. These are large infrastructure projects, such as the Pelješac Bridge, but also a number of smaller projects”, said Marić. In addition to the new projects, economic growth should be supported by growth in private consumption. “Investments, continued recovery in private consumption and a slight contribution of net exports will be the main drivers of growth”, said Marić, reports Index.hr.
Due to tax changes implemented at the beginning of 2015, the average wage increased last year, which among other things encouraged the growth in private consumption. However, the new government, for now, has no plans for additional tax changes. “We believe that the main boost to personal consumption growth will be achieved by the recovery of the labour market”, said Marić.
Minister expects that this year about 15,000 new jobs will be created, not including seasonal jobs. “In addition to economic growth, that is our main challenge”, said Marić. He said that they would consider the issue of reducing the number of employees in state and public administration. “I will openly say that, from the budget perspective, I see the wage bill as a problem”, he said, stating that the total wage bill exceeds 11 percent of GDP.
He also talked about the possibility of layoffs in public administration. He pointed out that no one should be fired overnight, and that there are additional training programs and other forms of active employment policies. “More than 380,000 people, or one in four employees in the country, work in the public sector if we include public companies and local government administration. We have started a dialogue with union representatives and I hope for a constructive and sustainable solution”, said Marić.
Finance Minister also said that, in the first two months of this year, the budget had recorded a growth of tax revenues. “Tax revenues have increased, with value added tax and salary contributions increasing by more than 3 percent. Excise duties revenues have also been increasing while the company tax revenues are lower, as expected. We have planned the revenues in line with the macroeconomic projections and at the moment, I do not see any anomalies”, concluded Marić.
Speaking on Friday, Marić announced the reduction of public debt by the end of the year. “This is the essence of all the problems we are facing. The aim is to neutralize the rapidly growing public debt. As early as this year, if all goes according to plan, we expect stabilization and eventual reduction of public debt. The main challenges are new jobs and other items. Our primary and basic goal is to increase the potential of Croatian economy”, said Marić yesterday.