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46th regular session of the Government of the Republic of Slovenia

At today’s session, the Government confirmed the draft revised state budget for 2023, following the Government reorganisation and the reduction in expenditure by EUR 609 million. It also adopted the draft amendment to the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act, which is aimed at enhancing the efficiency of proceedings.

The Government confirmed the draft revised state budget for 2023 in line with the Government reorganisation. Revenue is projected to reach EUR 13.14 billion, with expenditure reaching EUR 16.08 billion. According to the adopted budget, expenditure has been reduced by EUR 609 million due, inter alia, to the successful action taken against rising energy prices and the lower amount of funds needed for their mitigation. The state administration was reorganised this year, with changes to the areas of work in certain ministries and the creation of new ministries. As the smooth, effective and transparent operation of state authorities can only be ensured if they have their own financial plans, the Government drafted a "technical" revised budget. The current budget was drawn up on the basis of the autumn economic forecast of the Office of the Government of the Republic of Slovenia for Macroeconomic Analysis and Development and the estimated revenue for 2022, while the revised budget takes into consideration the updated macroeconomic basis from the spring economic forecast for 2023 and the budget realisation in the first three months of this year. Compared to the adopted budget, revenue in the revised version is 1.7 percent or EUR 233 million lower due to a decrease in estimated tax revenue, mainly the drop in personal income tax paid into the state budget, which is the result of an agreement reached between the Government and the association of local authorities on increasing the lump-sum expenditure to EUR 700 for 2023 and 2024. Revenue from corporate income tax predicted in the autumn forecast will also decrease, as the Financial Administration of the Republic of Slovenia collected less taxes, calculated based on the submitted corporate income tax returns for 2022. And finally, revenue from the EU budget will also decrease, due solely to the changed dynamics of revenue from the 2014–2020 perspective (the retention of EUR 167 million until 2025) and the 2021–2027 perspective, rather than to a loss in funding. Compared to the adopted budget, revenue in the revised budget has decreased by 3.6 percent or EUR 609 million, due among other things to the successful action taken against rising energy prices and the lower amount of funds needed for their mitigation. At the time of the preparation of the budget last autumn, the energy market was significantly more unpredictable than at present, and the Government has adjusted the appropriations accordingly. It has also reduced the planned reserve for the financing of measures related to COVID-19 and, due to the changed dynamics of project implementation, the planned cohesion policy expenditure for the period 2021-2027. The planned deficit is thus EUR 376 million lower than in the adopted budget, standing at EUR 2.94 billion, or 4.5 percent of gross domestic product. The Government is aware that fiscal rules will be back in force next year, so public finances must be managed prudently, which is done also with a lower planned deficit.

In order to ensure the smooth implementation of the budget, the Government has also adopted a draft amendment to the Implementation of the Republic of Slovenia Budget for 2023 and 2024 Act. The amendments concern, among other things, the provision of resources to the budgetary fund for the implementation of the Recovery and Resilience Plan, which, notwithstanding possible delays in reaching milestones, will allow for effective absorption of the Recovery and Resilience Mechanism. The amendment also sets the amount of government borrowing allowed this year, down from EUR 4.97 billion to EUR 4.17 billion. The maximum amount of permissible government borrowing is determined on the basis of the revenue and expenditure accounts, financial claims and investments, and the repayment of debt principal maturing in the current financial year.

The draft Act Amending the Financial Operations, Insolvency Proceedings, and Compulsory Dissolution Act (ZFPIPP) has been prepared to implement the Directive on Restructuring and Insolvency, eliminate the constitutional inconsistencies of the provisions of the ZFPPIPP found by the Constitutional Court of the Republic of Slovenia, and increase the efficiency of insolvency proceedings – both compulsory composition proceedings and bankruptcy proceedings. The draft Act pursues these objectives through amendments that tighten the rules governing the obligations of management upon the occurrence of insolvency (and through supplementing the rules governing management upon the occurrence of imminent insolvency) by creating the possibility of restructuring claims in the context of a new judicial restructuring procedure for the purpose of eliminating imminent insolvency in cases where the debtor is not yet insolvent, but is threatened by insolvency. In compulsory composition proceedings (and therefore with a view to remedying insolvency that has already arisen), the possibilities for applying specific financial restructuring rules are extended. The procedure for simplified compulsory composition is replaced by special rules (for small businesses) to be applied in compulsory composition proceedings, which allows greater control of claims filed and improves creditors’ procedural position. The draft Act also includes several solutions for improving the repayment of creditors in bankruptcy proceedings and ensuring greater transparency of sales in bankruptcy proceedings, improving the position of workers in restructuring and in bankruptcy proceedings, and improving the efficiency of disciplinary proceedings against receivers. With regard to personal bankruptcy, the proposal shortens the trial period, in accordance with the Directive on Restructuring and Insolvency. However, it imposes stricter conditions for debt forgiveness. The draft Act also provides an extraordinary legal remedy, i.e. a review of certain decisions in bankruptcy proceedings, thus strengthening the role of the Supreme Court of the Republic of Slovenia in such proceedings.

The Government adopted the Spatial Development Strategy of Slovenia 2050. The vision of spatial development in Slovenia is to prudently manage its space and ensure that its people have optimal conditions for a safe and healthy environment and a high quality of life. Slovenia will base its development on its spatial potential, visibility and identity. The Strategy lays down long-term national strategic goals and guidelines for spatial development activities. It sets out the vision of Slovenia's spatial development, long-term goals and the concept of spatial development, including priorities and guidelines for achieving the objectives. The Strategy follows the statutory principles of spatial development, in particular the principles of sustainable spatial development, spatial identity, controlled settlement, the coordination of interests, professional competence and public participation. The Strategy provides substantive guidelines for the implementation of several new spatial instruments, such as the regional spatial plan, the maritime spatial plan, and instruments concerning wider city areas, urban development and green infrastructure. As a step towards fulfilling the long-term goals and guidelines of the Strategy, an action programme for the implementation of the Strategy until 2030 will be drawn up, which will set out tasks and link measurable spatial development targets to the implementation of sectoral policies in the specified programme period.

 

Minister of Finance Klemen Boštjančič

Minister of Finance Klemen Boštjančič | Author Katja Kodba/STA

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