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Austerity: Government wants to reduce by half number of secretaries of state and eliminates additional pay for hard conditions
The government prepares to reduce the number of positions in the state apparatus by reducing by 50% the number of secretaries of state and offices of secretaries of state who remain in the system, official sources declared.
The reduction by 50% will not affect institutions with a single secretary of state, while state institutions with many positions of secretaries of state will lose more than half of the number of state secretaries.
The government has in view the number of leading positions in the central state apparatus. At present, the number of leading positions is limited in the case of public servants, where leading positions can be 12% of the total number of employees.
The decision applied to public servants will be extended to the rest of central administration, except for a few domains like education, health and police.
The measure has in view the elimination of the 15% increase for difficult work conditions. The authorities found out there were institutions where employees received this increase because air in Bucharest is polluted. The measure will not affect physicians, teachers, policemen or magistrates, who will receive a fixed amount of money and not the present 15%. The measure will be discussed with representatives of employees.
The government is to approve the budget rectification draft in its August 5 sitting.
The rectification is negative, with deficit mounting to RON 20 billion – 1.94% of GDP. Several ministries, including Transport, Education and Health will be losing funds, while intelligence services, except for STS, will be receiving more.
The austerity actions are considered to be an effort by the Government to raise almost RON 2 billion to keep budget deficit under 3 percent.
However, the rectification has been criticised by PSD’s ruling partner ALDE, which could break up the coalition. “If the draft remains this way, we won’t endorse it”, ALDE vice-president Varujan Vosganian threatened. ALDE is opposed to the cuts on investment and main ministries due to previous agreement within the coalition earlier this year.
ALDE is also opposing the almost half a billion RON allotted to the intelligence services. The Transport Ministry will be losing the highest amount following budget rectification, almost RON 300 billion, which is more than 20 percent of the budget.
The main reason for this loss is the ministry not complying with investment plans. More precisely, the Transport ministry spent only 30 percent of its budget in the first half of 2019. The Education Ministry is losing RON 2 billion as no project has been funded by EU money this year, namely the project to introduce interactive whiteboards into classrooms. The Health Ministry will be losing RON 400 million.
However, the Presidential Administration will be allocated over RON 9.5 million, the Romanian Intelligence Service (SRI)- RON 390 million, the Foreign Intelligence Service (SIE)- RON 46 million and SPP RON 42 million. STS will lose RON 70 million.
The hazard pay cuts will not affect doctors, teachers, policemen or magistrates, but officials said their wage benefits will have a fixed value, rather than 15% as before.
Equally, the job offers in the public sector will be blocked, except for within Healthcare, Education and the Police.
Other mesure is the introduction of a tax on beverages with high content of sugar.
The tax would be introduced from September and would increase the price per liter of soft drink by about RON 1. Thus, the tax for drinks with a sugar content of 5-8 grams per 100 milliliters will be RON 0.8 per liter, while the tax for beverages with a content of over 8 grams per 100 milliliters will be RON 1.
The authorities estimate that a Romanian drinks an average of around 80 liters of soft drinks with high sugar content per year. Similar taxes apply in the EU in the UK, Denmark, Finland or Ireland.
In late-April last year, Romanian MP Adrian Wiener, a Save Romania Union (USR - opposition) senator, also submitted to the Senate a project introducing an additional tax on sugary drinks. He said at that time that the bill was aimed at discouraging the consumption of such beverages by making them more expensive and consequently reduce the rate of cardiovascular diseases, of diabetes and of other serious conditions. The Senate passed his bill in November last year, but the project has been blocked in the specialized committees of the Chamber of Deputies since then
An other intended measure would also increase the excise applied to cigarettes starting September 1. From the increase of the excise duty, the state would collect about 160 million lei between September and December, analysts said. The cigarette maker JTI believes that the Government's intention, announced in the press, to advance the increase of the excise duty, starting in September, blows fiscal predictability and business plans.