When we are talking about the necessity of liberating the economy as a prerequisite for raising the standard of living, we must talk about the budget of Serbia, because it is an undoubted indicator of the economy’s workload and restraint, more precisely, that indicator is the way the budget is filled. And it is filled by taking away with a fist and a cap both from the citizens of Serbia, as well as from the economy and businessmen. Of course, absolutely, the budget of Serbia is not so big and it depicts poverty and underdevelopment, but so much, it comes from a heavily burdened economy.
One of the indicators of the level of burden on the economy and, moreover, the increase in the burden is the growth of the budget in relation to the growth of the economy. While the nominal growth of the economy in the last seven years was about 30%, in the same period the budget of Serbia increased by about 50%.
It is obvious that the budget of Serbia is growing significantly more than the economy and, to compensate, the state, according to Milojko Arsic, increased the grip from the pockets of citizens by some 13% by 2017.
In its 2007 economic program, the Liberal Democratic Party suggested that government spending should be reduced to below 40% of GDP. While the percentages can be debated, it is high time to take a serious look at the budget and, above all, where savings can be made to help the country start by helping everyone by deducting less.
What do citizens get in such a swollen budget? They can hope that a significant part of their hard-earned money will end up in an insufficiently transparent grant process and in public procurement whose quality and results are insufficiently controlled.
Nearly two billion euros will be spent next year without much scrutiny with reasonable suspicion that a significant part will end up in the pockets of close-knit businessmen or, in the absence of any control of success and quality, be thrown away in principle in overpaid and poorly executed public procurement.
Particular damage arises as a result of the fact that these significant budgetary funds are used to set up a competition, where the economy eventually finances its own unfair competition, and citizens pay for the guild of unsuccessfully run public enterprises and dubious tenders. While in this way, in a non-transparent manner, and ultimately, for the most part economically, we spend 2 billion euros, investments in the quality of services offered by the state remain limited, which will only further highlight the insufficient quality of these services.
After fiscal consolidation, the budget foresees wage increases in the public sector, which, depending on the ministry, amount to up to 15 percent, with an average of 9.6 percent, well above economic growth. The move, in addition to being financially irresponsible and re-drawing negative consequences as a previous irresponsible increase, also widens the already existing and significant gap between salaries of private and public sector employees, which is not and cannot be sustainable in the long run.
The budget also referred to the relief of the economy, with a reduction in the tax burden on labor from 62 to 61%. But, taking into account the aforementioned trends of increasing the tax burden, this decrease is almost insignificant.
The Prime Minister claims that this is a development budget and that this budget is balanced, but, as we have seen, the balance is, as we have seen, the inequality of the private and public sectors, both businessmen and employees. The development budget anticipates investments and their level is at the minimum necessary, but at the same time this budget is a symptom of a burdened economy that could itself use the billions of euros pumped out of it undoubtedly far more efficiently than the average bureaucratic apparatus, creating a higher growth rate.
Not to mention the authorities that decide on investments and their implementation in the way that the authorities of the Republic of Serbia decide.
