PETROVIC: Salaries to remain frozen in 2017, pensions in 2018

Pavle Petrovic (Photo: mc.rs)

Petrovic pointed out that the height of the salaries and pensions exceeded Serbia's economic strength expressed through the GDP. He explained that the recovery of public finances required the budget deficit to go down to 0.5% of the GDP, and of the public debt to below 60%, and for that to happen, savings are needed.

- Half of the necessary savings might come from the reformation of the Tax Administration and larger permanent income thereof, as well as the reformation of public enterprises and the privatization, whereas the other half needs to come from the budget savings, mostly salaries and pensions – said Petrovic.

In order to achieve this goal, it is necessary, as he pointed out, to keep the salaries frozen in 2017 and the pensions in both 2017 and 2018, since, according to him, only such measures may help achieve budget savings.

- The rationalization of the number of employees cannot achieve this – he says and explains that the surplus of employees is smaller than the projected 75,000 in three years and that it is 20-30 thousand instead.

So far, he said, 15,000 people have left their jobs, but most of them have retired and haven't been replaced, whereas only a small number of people lost their jobs.

- It's realistic to reduce the number of employees by another 10-15 thousand and we see a surplus of only around 6,000 employees in local self-governments. The rest would have to be based on serious reformation plans, both in healthcare and the school system, and not on forced rationalization – he said.

The goal, he reminded, was for the share of the pensions in the GDB to be 11%, and of the salaries about 8%, and both exceed that level.