site.btaParliamentary Social Committee Refuses to Support Government's Budget Proposal

Parliamentary Social Committee Refuses to Support Government's Budget Proposal

Sofia, November 16 (BTA) - The parliamentary social committee refused to support for first-reading debate the government's proposal for budget of the State Public Social Insurance. It received the support of eight MPs but seven voted against it and one abstained.

Labour Minister Zornitsa Roussinova and the CEO of the National Social Insurance Institute, Bisser Petkov, presented the highlights of the budget proposal. They said it follows the trends in the pension reform which started in 2016, aims to ensure a phased increase of pensions, guarantee incomes and balance expenditures and revenues.

Pensions are set to grow by 2.4 per cent from July 2017 to reach an average pension of 341.57 leva, which is 10 leva more than in 2016.

The average contributory income is budgeted at 809.15 leva.

Pension insurance contributions are set to increase to 18.8 per cent from the current 17.8 per cent.

The contributory income threasholds will increase by an average of 2.6 per cent from 2016 securing an expected increase of budget revenue by some 24.3 million leva.

The maximum contributory income will stay unchanged at 2,600 leva for all insured persons. The minimum monthly contributory income for all self-insured who had no economic activity in 2015 or have started economic activity in 2016-2017, will be 460 leva.

The ceiling for all pensions drawn by one person will remain at 910 leva in 2017.

The projected costs for pensions in 2017 total 8,935,000,000 leva.

The minimum daily unemployment benefit remains unchanged at 7.20 leva. Also, it may not be over 60 per cent of the contributory income of the jobless person before the loss of employment.

The employers are supportive of preserving the maximum contributory income. They, however, remain strongly concerned over what they see as a chronic problem with the abuse of the disability pension schemes, said Vassil Velev of the Association of Industrial Capital in Bulgaria.

The employers' position was supported by the Patriotic Front and they refused to back the proposed budget. Patriotic Front MP Dimiter Bayraktarov said that 494,000 Bulgarians receive a social disability pension. If that was realistic, it would mean that one in two pensioners or one in four Bulgarians excluding the children is gravely ill.

The Bulgarian Socialist Party (BSP) are not backing the proposed budget either, but for different reasons. MP Georgi Gyokov said they cannot support "such stagnation with a freeze of social payments and re-establishment of poverty". He also argued in favour of a bigger increase of the pension insurance contribution and against the preservation of the maximum contributory income.

The Reformist Bloc support the proposed budget, especially considering the emerging political instability. Dimiter Tanev MP said one strength of the budget proposal is that it is not populist and its weakness is that it has no reforms.

Radan Kanev said that the committee is obviously refusing to back the budget but considering the current situation a different solution will have to be sought in the debating chamber.

He said that keeping this year's budget for next year - which will happen if the legislature fail to reach a compromise on the government's 2017 budget proposal - would be "unjustified cruelty to the socially vulnerable groups".

Kanev further suggested that one option could be a better budget proposal prepared by the future caretaker government.

The government of Prime Minister Boyko Borissov has tendered its resignation and Parliament is expected to put it to a vote later on Wednesday, paving the way to the appointment of a caretaker government after all other parties in Parliament have declared that they are in favour of early elections.

The chair of the parliamentary social committee, Hassan Ademov (Movement for Rights and Freedoms), sees nothing dramatic in not passing the proposed budget. "People will still receive their pensions and unemployment benefits," he said.

The only risk he sees is to the planned increase of pensions and the expected increase of revenue from the higher pension insurance contributions.