New Croatian Government Programme: Employment, Wage Hikes, Tax Cuts

Total Croatia News

ZAGREB, July 23, 2020 – Creating 100,000 jobs, increasing the average and minimum wages and further tax cuts are some of the goals of the programme of the new Croatian government that will be presented in parliament on Thursday.

The programme covers five main areas: social security, a prosperous future, economic sovereignty, stronger statehood and global recognisability.

The new government of Prime Minister Andrej Plenkovic aims to spend HRK 10 billion in creating conditions for opening 100,000 jobs and ensure an average monthly salary of HRK 7,600 and a minimum wage of at least HRK 4,250 by the end of the term.

It plans to spend HRK 3 billion in modernising the healthcare system, build a national children’s hospital in Zagreb, revitalise the Institute of Immunology, and increase pensions by at least 10%.

Further tax cuts are also planned. The VAT rate on all food will be reduced from 25% to 13%, and income and profit taxes will also be reduced.

The education reform and digitalisation will continue. HRK 5 billion will be invested in modernising the education system and providing 50,000 scholarships.

Another HRK 5 billion will be invested in innovation, entrepreneurship and new products for the purposes of digital transformation of industry and increasing exports. Investment in research and development will be increased from the present 1% to 2.5% of GDP, and creative industries will be developed.

To promote demographic revitalisation and improve the status of families, the government will subsidise 20,000 housing loans for young families, provide a parental allowance in the amount of a full monthly salary, extend opening hours for another 200 kindergartens and regulate Sunday work.

The coronavirus pandemic and disruptions in the supply chain in the globalised economy have confirmed the need for self-sufficiency in food and energy production in order to achieve economic sovereignty.

To that effect, the government plans to increase agricultural production by 30% to HRK 22 billion, build 20 regional fruit and vegetable centres, double the area of land under irrigation, and adopt a new strategy for development of sustainable tourism.

With the number of cabinet ministries already reduced, the government aims to halve the number of local government officials and ensure the functional linking of municipalities. It will continue the judicial reform, adopt a new enforcement law and continue the uncompromising fight against corruption.

The government will insist on balanced regional development, planning to invest HRK 30 billion for that purpose.

In cooperation with the City of Zagreb and adjacent counties, the government will continue to address the consequences of the March 22 earthquake and adopt an effective legislative framework for reconstruction with the aid of domestic and international financing sources.

The government pledged to continue working on the political positioning and economic strengthening of Croatia. It will promote the national interests, protect the dignity of the Homeland War and veterans, and strengthen the Croatian military and police.

The achievement of the strategic goals – accession to the Schengen area, euro area and OECD – will make the national sovereignty and influence of Croatia in Europe and the world stronger, the government said in its programme, pledging further support for the Croatian diaspora.

The government said it was aware of the challenges facing it over the next four years, including the economic recovery from the consequences of the coronavirus pandemic, the post-earthquake reconstruction of Zagreb and its environs, and the transformation of the national economy.

The government’s priority will be to use the €22 billion from the new EU budget and the New Generation EU instrument for a speedy recovery of the economy and for investment in the priority areas defined by its programme.

(€1 = HRK 7.527377)


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