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Parliament Approves 2015 State Budget
Civil Georgia, Tbilisi / 12 Dec.'14 / 21:15

Parliament endorsed with 82 votes the 2015 state budget, which sets revenues at GEL 8.09 billion and spending at GEL 8 billion.

UNM parliamentary minority group criticized the budget for “not being oriented towards growth”, which is “not focused on attracting investments” and “will not create new jobs”. UNM MPs were also criticizing the draft budget for increased government debt. Government’s debt-to-GDP ratio is set at 37.2% in 2015.

Lawmakers from the opposition Free Democrats (FD) party also refused to support next year’s budget. FD MP Irakli Chikovani said that his party cannot take responsibility for this budget as FD is no longer represented in the executive government after the party quit GD ruling coalition in November. He also criticized the government for budget underspending.

The budget, approved by the Parliament, sets tax revenues at GEL 7.6 billion next year, up by GEL 780 million from this year’s target. UNM lawmakers said it’s not a realistic to meet this target next year. The increase, according to budgetary figures, is expected mainly at the expense of forecasted growth in revenues from personal income, value added and excise taxes.

Revenues from value added tax are set at GEL 3.529 billion in 2015, up from GEL 3.27 billion this year; personal income tax target is set at GEL 2.085 billion, up from 2014 target of GEL 1.77 billion; revenues from corporate profit tax – GEL 900 million, down from 2014 target of GEL 912 million, and revenues from excise tax are expected at GEL 947 million, up from GEL 739 million this year.
 
Government’s forecast for GDP growth in 2015 stands at 5%, the same as in 2014. According to the preliminary data of Geostat, economic growth in the first ten months of this year was 5.6% y/y.

2015 budget sets revenues from foreign grants at GEL 215 million.

“Social and healthcare funding remains the priority,” Finance Minister, Nodar Khaduri, told lawmakers on December 12.

Funding of the Healthcare Ministry will be increased by GEL 127 million to GEL 2.785 billion next year.

GEL 1.39 billion of that funding, or 17.3% of total budgetary spending next year, is allocated for covering age pensions.

Starting from September 1, 2015 monthly minimum pension will increase for all categories of pensioners by GEL 10 to GEL 160. Initially government was planning to increase minimum monthly pension by GEL 25 only for those pensioners who are in the list of the most socially vulnerable citizens, but eventually opted in favor of increasing allowance for all age pensioners by GEL 10. 
 
Breakdown of funding per ministry in 2015 budget is as follows:

  • Ministry of Healthcare and Social Protection – GEL 2.785 billion (GEL 2.658 billion is allocated for the ministry in 2014);
  • Ministry of Regional Development and Infrastructure – GEL 1 billion (2014 – GEL 875 million);
  • Defense Ministry – GEL 640 million (in 2014 MoD’s initial funding was set at GEL 660 million, but it was cut to GEL 615.9 million, which was mainly attributed to transfer of Delta military industrial complex from MoD to the Ministry of Economy; in 2013 MoD’s funding was set at GEL 660 million, but actual spending amounted to GEL 610.4 million; 2012 - figure stood at GEL 730.6 million and at GEL 711 million in 2011);
  • Interior Ministry – GEL 638.7 million (2014 – GEL 600 million; 2013 – GEL 570 million);
  • Ministry of Education and Science – GEL 853.9 million (2014 – GEL 754.3 million);
  • Ministry of Agriculture - GEL 292.9 million (2014 – GEL 263.5 million);
  • Finance Ministry – GEL 100 million (2014 – GEL 96 million);
  • Ministry of Economy and Sustainable Development – GEL 120 million (GEL 87 million was initially planned in 2014, but it was then revised upwards to GEL 131 million);
  • Ministry of Energy – GEL 125 million (2014 – GEL 114.6 million);
  • Justice Ministry – GEL 68.5 million (2014 – GEL 60.5 million);
  • Prison system ministry – GEL 155 million (2014 – GEL 154 mln);
  • Foreign Ministry - GEL 100 million (2014 – GEL 90 mln);
  • Ministry of Culture and Protection of Monuments – GEL 95 million (2014 - GEL 80 million);
  • Ministry of Sport and Youth Affairs – GEL 70 million (2014 – GEL 53.9 million);
  • Ministry of Environment Protection – GEL 39 million (2014 – GEL 31 million);
  • Ministry for IDPs from the Occupied Territories, Accommodation and Refugees – GEL 70 million (2014 - GEL 48 million);
  • State Ministry for Reconciliation and Civic Equality Office of the State Minister for Reintegration – GEL 1.35 million (2014 - GEL 1.35 million);
  • Office of the State Minister for European and Euro-Atlantic Integration – GEL 3.1 million (2014 – 2.8 million);
  • Office of the State Minister for Diaspora Issues – GEL 1.2 million (2014 – GEL 900 thousand).

2015 funding of the Parliament will remain unchanged for third consecutive year at slightly over GEL 52 million.

Initial draft of 2015 budget envisaged increase in the government’s discretionary reserve fund by GEL 20 million to GEL 70 million. But the final draft, endorsed by the Parliament on December 12, keeps its funding unchanged at GEL 50 million as it is in 2014.

The President’s discretionary reserve fund will also remain unchanged at GEL 5 million next year. 

Funding of government’s and president’s administrations will increase to GEL 32.5 million and GEL 9.8 million, respectively. In 2014 the government’s and President’s administrations received funding of GEL 20 million and GEL 9 million, respectively.  

Transfers from the central budget to the local municipalities and regional authorities will increase by GEL 58.1 million to GEL 854 million next year. 

Public Defender’s Office (PDO) will receive GEL 4 million next year, up from GEL 2.3 million in 2014.

Funding of the Office of Personal Data Protection Inspector will more than double in 2015 to GEL 1.45 million.

Funding of common courts will increase from this year’s GEL 47.4 million to GEL 50 million in 2015 to cover increase of salaries.

Funding of the Georgian Public Broadcaster (GPB) will also increase from current GEL 38 million to GEL 40.8 million in 2015.

As no elections are planned next year, funding of the Central Election Commission will decrease almost 2.5-fold to GEL 22.5 million next year.

Like in 2014, next year the Georgian Patriarchate will again receive GEL 25 million from the state budget.

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