Our Take on the 2015 Budget Proposal

Confusing increase of expenditures

Besides the increase of the capital budget because of the highway and expenditures for payment of debts, which are in the center of public attention, there are other interesting points in the draft Law on the Budget for 2015, which was made public this Sunday.

Much has been said about the drastic reduction of expenses for business trips. The reduction is certainly there, but only about 25%, i.e. about 1.4 million less than it was planned for 2014 (from 5.4 to 4 million).

The biggest increase in relation to the plan for 2014 are transfers. Transfers to education are almost 15 million higher than in 2014 (an increase of 300%). Similar situation is with the transfers to institutions, which are greater more than 400%, or about 13 million more. MPs must pay attention to these cases and get the explanation what lies behind this increases.

On the other hand, the proposed budget for 2015 no longer has a clearly separated amount that will be transferred to public enterprises. Are these really gone from the state budget, or are they hidden in another budget line – this is also an issue that needs to be clarified.

Compared to 2014, there has been an increase in service contracts (about 15%), despite the recommendation of the SAI to reduce this type of employment. SAI indicated that this practice where service contracts are used to employ people who perform usual and planned activities of the state authorities (therefore occupying positions that are systematized) is not in accordance with law.

Bigger budget for almost all spending units

The budget of almost all spending units budget has been increased, except for a few exceptions, such as the Parliament of Montenegro, Ministry of Sustainable Development and Tourism (and the Agency for Environmental Protection), General Secretariat of the Government of Montenegro (and Concessions Commission), Commission for Control of State Aid, Ministry of Science, Labour Fund, etc.

Reduction of the budget for the Commission for Control of State Aid is especially worrying. After a review of guarantees given by the Government, the SAI, among other things, recommended strengthening of this body’s capacities.

Failure to comply with the Guidelines of macroeconomic and fiscal policy

We would like to remind that the Government adopted Guidelines of macroeconomic and fiscal policy in May this year, which, among other things, contain spending thresholds for key spending units for the next three years. Thresholds for the next year are binding and must be respected, while the ones for the next two years are only indicative.

These thresholds (limits) have been breached on several instances in the 2015 budget proposal. The clearest case is the budget of the National Security Agency, which was increased by almost half a million compared to 2014 and well over the established limits of the Guidelines. Similarly, the budget of Ministry for Information Society is more than 2 million higher than the limit in the Guidelines. There are a number of such cases, and according to our information, in case of overdraft limit is not about interest rates, repayment of debts, budget reserves, donations or co-financing of IPA projects, which are outside the limits of the Guidelines.

The good side – higher budget for oversight

To its credit, the Government has fully honored the request of the State Audit Institution which received the funds as it was looking for – around 1,4 million euro for 2015. So, this time there was no reduction of the request for allocation of budget funds by the Ministry of Finance, which had occurred in previous years.

Somewhat higher budget compared to the plan for 2014 is now planned for the Ombudsman, the Agency for protection of personal data and free access to information, the Inspection Directorate as well as the Prosecutor’s Office and the Judiciary.

A bit more time for the budget debate

This is the first annual budget proposal, which is prepared according to the newly adopted Law on Budget and Fiscal Responsibility, which means – the first time that the Parliament received budget proposal earlier than in previous years (by 15 November, instead of the end of November). Of course this does not mean that it is now enough time for proper parliamentary consideration of the budget – we are still far from the best practice that says the Parliament should have a minimum of three months to consider the budget proposal. However, we hope that more time for discussion will have an impact on the parliamentary debate on the budget and that all the working bodies will consider the budget proposal. We recall that last year there were about 70 amendments to the budget by the MPs and that many were in the end endorsed by the majority in plenary. So, even in such a short period of time, there is room for the Parliament to react and make appropriate adjustments.

How to analyze the data “locked” in pdf?

Ministry of Finance does not publish budgetary data in a in a machine readable format. Now, we have the budget for 2015 only as a scanned document on the website of the Parliament in which the numbers are “locked”. This way, the Parliament, media, NGOs and citizens are placed in a disadvantageous position in regard to discussing and analyzing the budget. Message to the Ministry of Finance is — open up the budget and publicly share your excel tables with us!

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