Fiscal policy covers, among other things, the management of revenues and expenditures of the four public finance budgets. By implementing a restrictive or expansive fiscal policy, the Government tries to control economic conditions in the country, for example unemployment, economic growth and inflation.
Fiscal policy and medium-term fiscal framework
Through fiscal policy, the Government controls public finance revenue and expenditure and thus pursues long- and short-term economic goals. Slovenian economic and fiscal policy guidelines are set out in the National Reform Programme and the Stability Programme.
The fiscal rule is a budget rule intended to ensure the medium-term balance of general government revenues and expenditures without (long-term) borrowing, thus also ensuring fiscal sustainability. In 2013 the National Assembly adopted a constitutional act amending Article 148 of the Constitution. This Article stipulates that general government revenues and expenditures must be balanced in the medium-term without borrowing or that revenues must exceed expenditures. This amendment laid down the fiscal rule at the constitutional level. In July 2015 the National Assembly adopted an act specifying how this obligation imposed by the supreme law of the country will be fulfilled in practice. The Fiscal Rule Act defines in detail the principle of medium-term balance and requires a gradual elimination of structural deficit of the general government, i.e. the deficit excluding the impacts of the economic cycle (e.g. strong growth or recession) and the effects of one-off and other temporary measures. The elimination of structural deficit must be carried out in accordance with the dynamic envisaged in the Stability and Growth Pact.
Medium-term fiscal framework
In accordance with the Fiscal Rule Act, the Government drafts and the National Assembly adopts the public spending plan for the next three years. This sets key fiscal frameworks to be adhered to in fiscal planning. A medium-term fiscal framework sets two key objectives: the target balances (deficit or surplus) of the general government and of individual public finance budgets and the maximum expenditure of the general government and individual public finance budgets (i.e. the state budget, municipal budgets, the pension insurance fund and the health insurance fund).
Public finance budgets
The public finance budgets include the state budget, municipal budgets, the pension insurance fund and the health insurance fund. The largest is the state budget, representing 48.4% of total expenditure of all four public finance budgets. Next is the Pension and Disability Insurance Institute of Slovenia (ZPIZ), amounting to 27.1%, followed by the Health Insurance Institute of Slovenia (ZZZS) with 14.2% and municipal budgets with 10.3%.
Below are links to the most recent data from the statements of individual public finance budgets and consolidated public finance budgetary accounts. The monitoring of monthly budgetary data is particularly important in view of determining any deviations of revenue and expenditure from the adopted financial or liquidity plans and also in view of appropriate planning of fiscal policy.
The state budget data show in detail the actual revenue and expenditure of the State. The revenue, of which the majority is collected from taxes, is used for financing the obligations of the State in a particular year.
Pension and Disability Insurance Institute of the Republic of Slovenia
The Pension and Disability Insurance Institute (ZPIZ) pays pensions, disability allowances and other transfers providing social security to all claimants. The Institute also pays health insurance for all pensioners. The main revenue of the Institute is from social security contributions. The transfer from the state budget also represents a large part of the revenue, as the collected social security contributions are not sufficient to cover the pensions in full.
Health Insurance Institute of the Republic of Slovenia
The Health Insurance Institute (ZZZS) covers the costs of the operation of public health institutions and the provision of healthcare services (e.g. salaries, medicinal products and medical devices). The larger part of the costs are sickness benefits. The revenue of the Institute consists mostly of health insurance contributions. Another part of the revenue is from transfers from the pension fund in the form of health insurance contributions for pensioners. In recent years the state budget resources allocated to special healthcare programmes have been increased.
Municipal budgets represent the revenue and expenditure of all 212 municipalities. The two major sources of municipalities’ revenue are income tax and property tax (such as the land rent for use of building grounds). Other important sources are capital gains, income from public utility charges, municipal fees and fines. Expenditure includes expenses for the operation of municipalities, capital expenditure, subsidies, transfers to individuals (this includes partially covered expenses for pre-school programmes and subsidies for home care) and for the operation of public institutions at the local level.
Consolidated public finance budgetary accounts
Consolidated public finance budgetary accounts include the accounts of all four public finance budgets as a whole, i.e. the state budget account, the aggregate account of municipal budgets and the accounts of the ZPIZ and ZZZS. Consolidation in the public finance budgetary accounts means that all flows from one public finance budget into another are mutually offset to prevent double capturing and artificial increase in the amount of public finance revenue and expenditure.
Regular publication of cash-based fiscal data
In order to prevent a repeat of the past fiscal crisis, the European Union adopted Directive 2011/85/EU, which lays down detailed rules concerning the budgetary frameworks of the Member States, which involves a series of arrangements, procedures, rules and institutions that form a basis for implementing the country’s budgetary policy. The Directive requires Member States to regularly and in a timely manner publish reliable, transparent and quality fiscal data to allow a proper and well timed monitoring of the fiscal situation in a particular Member State. This promotes budgetary discipline and fiscal sustainability which facilitates prompt action in the event of unexpected budgetary developments in order to prevent excessive public deficit. The Member States are obliged to regularly publish cash-based fiscal data (i.e. on cash accounting basis, which means that in a certain fiscal year all revenues and expenditures received and paid from 1 January to 31 December of the current year are included) for the general government and all sub-sectors of general government. They are also obliged to publish a detailed reconciliation table showing the methodology of transition between cash-based data and data based on the ESA standard (the European system of national and regional accounts). The Member States must also present relevant information on contingent liabilities (government guarantees, non-performing loans and liabilities stemming from the operation of public corporations) and information on the participation of general government in the capital of private and public corporations.
Cash-based fiscal dataReports | Ministry of Finance
Special data dissemination standards – SDDS Plus
Following the financial crises of the mid- 1990s the International Monetary Fund (IMF) established the Special Data Dissemination Standard – SDDS in the year 1996 with the aim of improving data transparency and providing sufficient, adequate economic and financial data for the determination/assessment of the economic situations of individual countries. Thus, trough SDDS main and key economic data of each country are collected and disseminated in one place so that capital and financial market regulators, decision and policy makers, and users in general can assess the broader economic and fiscal position of individual countries. The following year, a simpler GDDS standard was introduced for countries with less developed statistical systems that aim to develop their statistical systems and, eventually, meet SDDS requirements. In 2012, the IMF established improved standards SDDS Plus as an upper tier of the IMF’s Data Standards Initiatives to address data gaps revealed during the global crisis. The SDDS Plus includes additional nine data categories with specified coverage, periodicity and timeliness requirements related to these additional data categories. In accordance with SDDS Plus, the Ministry of Finance provides and publishes fiscal data in the framework of Statement of Operations under categories: Central Government Operations – Budget, Central Government Operations and General Government Operations on a voluntary basis in two different file formats and description of collection and procession of fiscal data and methodology used.