CEOL - Parliament okays Serbian 2000 budget, spending

BELGRADE, Dec 22, 1999 -- (Reuters) Serbia's parliament passed on Tuesday a balanced 28.93 billion dinars ($2.49 billion) budget for 2000, while the government vowed, as usual, to cut the spending-to-GDP ratio to 49.5 percent.

The 2000 budget compared to 21.458 billion dinars for 1999.

It was passed by a unanimous vote of 174 deputies of the ruling leftist coalition comprised of the Socialists, neo-communists and ultranationalists, as the last remaining opposition party the Serbian Renewal Movement refused to attend.

Presenting the budget to parliament, Finance Minister Borislav Milacic said the public spending policy was a "key pillar of the economic policy".

"Overall economic stability will largely depend on how much we manage to maintain stability in public spending," he said.

The Serbian government insists it pursues a policy of price and currency stability.

Independent economists see Yugoslav year-on-year inflation ending 1999 at above 50 percent. The dinar started the year at a rate of nine to the German mark. It was changing hands at 20 to the mark on the black market on Tuesday and is officially fixed at 6.

The government traditionally promises to cut public spending to 49.5 percent of GDP and always exceeds the limit.

The budget itself will finance the Serbian police with 6.539 billion dinars, of which 4.832 billion is set aside for wages. This compared to 5.1 billion dinars set aside in 1999.

The Education Ministry will get 5.2 billion dinars compared to 5.78 billion in 1999. Serbia set aside 1.44 billion dinars for agriculture, up on 1.045 billion in 1999.

The government said it planned to raise 11.614 billion dinars from personal income taxes and 12.616 billion from excise duties. Court taxes will generate 54.5 million dinars, administrative taxes 732.3 million, corporate taxes 1.629 billion and "other public revenues" 1.186 billion.

Milacic said total public spending next year will grow to 87.695 billion dinars, including the budget.

Almost 31.0 billion dinars is planned to finance pensions to some 1.5 million Serb pensioners and 16.321 billion dinars will finance the health system and wages of health workers.

The next year's budget will ensure payments of 11 monthly salaries to the state administration workers. Pay rates are due to be increased by 10.5 percent during 2000, having been static for the past two years.

Serbia's taxpayers will also have to finance the Yugoslav government's needs, particularly those of the army, Milacic said.

"A reallocation of funds towards the federation is being proposed. The share of the federal budget in the total Serbian public spending would be 18.3 percent. This reallocation of funds has been made to ensure financing of the key functions, important for the defense of the country," he said.

The Yugoslav army is traditionally financed from the Yugoslav budget

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