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Govt Austerity Package: Internal Savings to Top EUR 270M (I)

Ljubljana, 23 March (STA) - The government plan for stabilising public finances through $internal savings$, which include limiting hiring in the public sector, lowering the prices of medical services and merging of public institutes and agencies, should bring EUR 270m in savings in 2012 and another EUR 150m in 2013.

The government plans to save EUR 8.5m this year and EUR 10.8m next year by reorganising public agencies and institutes, most notably by merging several educational institutes and centres.

The document sent to the social partners today also envisages the scrapping of the Public Procurement Agency and the transfer of the powers of the Slovenian Film Centre and the Public Agency for Books to the Education, Science, Culture and Sport Ministry, even though Minister Žiga Turk announced earlier today that the two agencies would not be scrapped but would only have their budgets cut.

The government also proposes that 13 smaller schools become part of larger schools and that the costs of the national secondary school-leaving matura exam be lowered. Less money would also be allocated for the financing of tertiary education.

By lowering compensations to public office holders for business trips abroad and cutting the financing of political parties by half, the government plans to save EUR 73.9m in 2012 and EUR 96.3m in 2013.

Under the proposal, the prices of medical services would be lowered by 3% as of May this year, along with reduction in prices for medical equipment. There would be no write-offs on delayed payments of health contributions.

The government also proposes expanding the use of cheaper versions of identical drugs to reduce the expenditures of the Health Insurance Institute (ZZZS).

The biggest savings (of some EUR 27m a year) are expected from changes to the 2011 law on Slovenske železnice that currently requires the state to pay the rail operator EUR 134m between 2012 and 2016. The government would shift the start of the payments to 2014.

The proposed measures also include restrictions on hiring in the public sector and outsourcing, as well as termination of employment contracts to those who meet the conditions for retirement; the contributions of these measures to the overall savings have not been calculated yet.

Performance bonuses would be lowered and annual leave limited to a maximum of 32 days.

As part of the plan, MPs would enjoy special benefits after the end of their term for only six months, down from a year at the present and the network of Slovenia's embassies and consulates would be decreased in size.

The Customs Administration would be merged with the Tax Administration, while the tasks of the Traffic Safety Agency and the Civil Aviation Agency would be transferred to the relevant ministry.

Among the proposals is also lowering of per capita transfers to municipalities and partial sell-off of state assets.

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