The Parliament approved with 83 votes to 11 on Friday the 2016 state budget, setting revenues at GEL 8.55 billion, up from 2015’s GEL 8.048 billion, and budgetary expenditures at GEL 8.54 billion, up from this year’s GEL 8.11 billion.
The state budget projects 3% economic growth next year.
Targeted tax revenues for 2016 are set at GEL 7.98 billion, accounting for 23.3% of projected GDP. The target is by GEL 580 million more than in 2015.
Revenues from value added tax are set at GEL 3.8 billion in 2016, up from targeted GEL 3.5 billion this year; personal income tax target is set at GEL 2 billion in 2016, up from 2015’s GEL 1.95 billion; revenues from corporate profit tax – GEL 980 million, up from 2015 target of GEL 951 million, and revenues from excise tax are expected at slightly over GEL 1 billion, up from this year’s GEL 900 million.
The government plans to raise GEL 1.27 billion in loans next year of which GEL 1.075 billion is expected to come from international financial institutions in a form of long-term soft loans, and GEL 200 from domestic market in a form of issuing treasury bills.
Finance Minister Nodar Khaduri told a parliamentary session on December 11, that the proposed budget reflects government’s “socially-oriented” policies and at the same time it is “oriented towards development with almost one billion lari planned to be spent on infrastructure projects.”
The 2016 state budget allocates GEL 3.16 billion for the Ministry of Healthcare and Social Protection, up from GEL 2.78 billion in 2015.
GEL 570 million is allocated for “universal healthcare program” in 2016, which is by about GEL 100 million more than in 2015.
GEL 1.57 billion is allocated for covering pension expenses in 2016, up from 1.39 billion in 2015. It accounts for about 18.4% of total budgetary expenditures of 2016.
Initial draft did not envisage increase of minimal monthly age pension.
The revised draft, approved by the Parliament, envisages increase of minimal pension from current GEL 160 to GEL 180 starting from July 1, 2016.
UNM opposition party has been campaigning since October for increase of minimal monthly pension by GEL 50 starting from January, 2016.
UNM has been calling for cutting “bureaucratic expenses” by about GEL 420 million and to redirect it to fund increase of minimal pensions from January. UNM lawmakers have also been calling for cutting taxes.
“More money should remain in economy and for that reason taxes should be cut. The proposed budget provides neither development of the business nor relief for socially vulnerable citizens,” UNM MP Sergo Ratiani said.
MP Zurab Japaridze, former UNM lawmaker who now leads newly launched New Political Center-Girchi (pine cone), also called for drastic cut of government administrative expenses and taxes.
“Too much money is wasted on social programs; it should instead be distributed in a targeted manner specifically for the most socially vulnerable,” MP Japaridze said.
MP Davit Onoprishvili of the opposition Free Democrats criticized the proposed budget as “inefficient”. “Resources available in this budget can be used much more efficiently,” he said.
Breakdown of funding per ministry in 2016 is as follows:
- Ministry of Healthcare and Social Protection – GEL 3.162 billion (initial draft GEL 3.07 billion; GEL 2.881 billion in 2015);
- Defense Ministry – GEL 670 million (GEL 667.3 million in 2015; GEL 667.4 million in 2014; GEL 610.4 million in 2013; GEL 730.6 million in 2012);
- Interior Ministry – GEL 595 million (GEL 591.65 million in 2015);
- Ministry of Regional Development and Infrastructure – GEL 950 million of which GEL 532 million is loan for infrastructure projects (GEL 869.5 million in 2015);
- Ministry of Education and Science – GEL 975.19 million (GEL 840.8 million in 2015);
- Ministry of Agriculture - GEL 321.35 million of which GEL 23 million will be loan (GEL 262.45 in 2015);
- Finance Ministry – GEL 90 million (GEL 91 million in 2015);
- Ministry of Economy and Sustainable Development – GEL 95.1 million (GEL 85.368 million in 2015);
- Ministry of Energy – GEL 135 million of which GEL 89.6mln is loan for electric power transmission network (GEL 114.3 million in 2015);
- Justice Ministry - GEL 70.5 million (GEL 66.1 million in 2015);
- Prison system ministry – GEL 153 million (GEL 150.5 mln in 2015);
- Foreign Ministry - GEL 110 million (GEL 89.5 mln in 2015);
- Ministry of Culture and Protection of Monuments – GEL 97 million (GEL 94.9 million in 2015);
- Ministry of Sport and Youth Affairs - GEL 97 million (GEL 69.8 million in 2015);
- Ministry of Environment Protection - GEL 42.1 million (GEL 36.57 million in 2015);
- Ministry for Internally Displaced Persons from the Occupied Territories, Accommodation and Refugees – GEL 85 million (GEL 70 million in 2015);
- State Ministry for Reconciliation and Civic Equality Office of the State Minister for Reintegration – GEL 1.35 million (same as in 2015);
- Office of the State Minister for European and Euro-Atlantic Integration – GEL 3.1 million (same as in 2015);
- Office of the State Minister for Diaspora Issues – GEL 1.2 million (same as in 2015).
- The State Security Service, which was separated from the Interior Ministry in August 2015, will receive GEL 100 million in 2016 that is by GEL 5 million more than initially planned.
The funding of the Parliament will increase from this year’s GEL 46 million to GEL 52 million in 2016.
Funding of the government’s administration stands at GEL 20 million in 2016, down by GEL 961,000 compared to the 2015. The government’s reserve fund will receive GEL 50 million.
President’s administration and President’s discretionary fund will receive GEL 9.8 million and GEL 5 million, respectively, same as in 2015.
The Central Election Commission will receive increased funding in 2016 at GEL 58.5 million as parliamentary elections are planned in October. This year the CEC’s funding was GEL 22.5 million.
Funding of the judiciary will also be increased; common courts – GEL 52 million (GEL 2 million more); Supreme Court – GEL 7.65 million (GEL 1 million more) and Constitutional Court – GEL 3.4 million (almost the same as in 2015).
Funding of the State Audit Service will be increased by about GEL 2 million and reach GEL 14.5 million in 2016.
Funding of the Public Defender’s Office is set at GEL 4.5 million, up by GEL 500,000 compared to 2015.
Funding of Georgian Public Broadcaster (GPB) will also increase from this year’s GEL 40.8 million to GEL 44.1 million.
Funding of the Georgian Orthodox Church will remain unchanged at GEL 25 million next year.
The fund for development of high mountain settlements is also planned next year and its funding will amount to GEL 20 million. This fund, as well as other social expenditures envisaged by the state budget will be aimed to meet the requirements of newly adopted law on the development of high mountain regions.