Phantom savings in the budget for the year 2024

Nearly a month after the legal deadline, the Government has submitted the budget proposal to the Parliament – some of our key observations are as follows (originally published in an article for the daily newspaper Vijesti).


Phantom Savings

Savings or rationalizations are absent in both the budget rebalances for the year 2023 and the budget proposal for 2024. It is important not to trust statements but to look at the figures, and they indicate that there is no reduction in “non-productive expenses” either by 200 or 35 million. In reality, there will be an increase in the current budget by 7% or 83 million, which includes an increase in all traditionally criticized positions.

A 5% reduction in official trips or representation, totaling around 300 thousand, is not beneficial when, for service contracts alone, we are giving almost a quarter more than the plan for this year, or 4 million more in total (a sum of 21 million).

Reducing “non-productive spending” should result from in-depth analyses of budget lines and precise cuts accompanied by changes in laws and established practices, not be subject to political maneuvering and superficial statements. The budget proposal does not indicate that such efforts have been made so far.

Never More Numerous, Never Better Paid Administration

The gross salaries of employees in the administration have increased by 40 million compared to the current year and will amount to 675 million in 2024. This increase comes in an already record-breaking current year, where we are paying 100 million more for salaries in public administration than the previous year. Even this planned amount will not be sufficient, as unions protest that the budget does not incorporate everything negotiated in collective agreements. Moreover, there are announcements of new parliamentary amendments to the Law on the Salaries of Public Sector Employees, selectively increasing coefficients for certain professions.

This represents a staggering increase in this budget item, caused by the growth in the number of employees, salary increases negotiated in new collective agreements, and the parliamentary finalization of the already porous Law on the Salaries of Public Sector Employees.

There has never been a greater number of employees, and they have never cost us more, it has been a long time since there was less talk about the need for optimization. Optimization cannot be the individual responsibility of each minister, nor does the role of the Minister of Finance in this area end with reducing the number of staff positions in their ministry. The Prime Minister and the Ministry of Finance must decisively halt irrational hiring, not only in the central administration but also indirectly, through the legal framework and in state-owned enterprises, public institutions, and, through special measures, in municipalities. The new law on the salaries of public sector employees must be a priority for the new government and the Ministry of Finance to regulate the currently poorly controlled chaos.

Capital Budget

There seems to be a discrepancy in the figures regarding the capital budget. The Prime Minister stated that, through the traffic light system, they decided to retain only projects that are mature in the new budget. However, the Minister of Finance recently stated that out of 374 projects in this year’s budget, 215 are entirely “dead,” and not a single cent has been spent on them this year due to the impracticality of these project ideas. How did we then end up with 330 projects after the triage was done? Some “dead” projects have been retained.

The second problematic figure is the “new” projects, which are 80, even though the working group of the same ministry selected only 18 from all the ideas for new projects a month ago, acknowledging that this selection might be excessive due to the immaturity of the ideas. Where did these new 60 projects suddenly come from, and what are their assessments? That is what the Government needs to share with the public, along with the rest of the information.

Employee salaries have increased more than the capital budget – next year, we will have an approximately 10% larger capital budget, with almost the same number of projects, except for one (highway) worth 90 million – meaning that only 190 million will be left for the remaining 329 projects.

It’s good that there is consideration for reforming the capital budget, and it’s positive that a new directorate has been formed in the Ministry for this purpose. However, it’s worth reminding that, by criticizing the current situation, Prime Minister Spajic essentially criticized the work of Finance Minister Spajic, particularly his actions in 2021 when, through the program “Montenegro Now,” he introduced hundreds of immature projects into the budget, accepting almost everything that came from municipalities or lawmakers as an idea.

The Case of RTCG

It is unclear why, among all the consumers whose budgets are determined by law, only RTCG is proposed for a change in funding in the laws accompanying the budget. At least ten other entities in our system have their budgets determined by a percentage.

The fiscal strategy from the end of 2021, which everyone seems to have forgotten (including the Fiscal Council, which we still do not have), prescribed the elimination of all percentage budget allocations.

The existing solution linking RTCG funding to a percentage of GDP (?!) has been awkward from the start and needs clarification. However, a bad solution cannot be replaced by an even worse and vaguer one, especially by proposed laws that have not undergone public discussion, are not accompanied by an impact analysis, and no one inside or outside the administration has heard of them until they appeared on the government’s website.


We hope that the MPs will manage to thoroughly examine the budget in the short time they have before the start of the year and, above all, that they will not make it even worse. In other words, the ruling majority will refrain from conditioning the adoption of the budget with amendments to an already problematic capital budget.

Marko Sošić

What the budget for the year 2024 brings, how the state will spend money, how it will collect it, and what it all looks like in a ten-year review of budgetary data can be found on our portal “Moj novac” 


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