Parliament passes government's program

  • 2000-11-16
  • Howard Jarvis
VILNIUS - A week after Lithuania's new Prime Minister Rolandas Paksas presented his program to the Parliament, deputies approved it on Nov. 9 by a vote of 72 to 48 with 16 abstentions.

The Social Democratic coalition, the country's leftist opposition, voted against the program. Its leaders continued to criticize it for its lack of specifics. The right-wing Conservative party also attacked the program, but chose to abstain from voting.

Paksas' Liberal Union party, and the New Union (Social Liberals) both supported the program, as did some of the Parliament's minor parties. The Liberals and the New Union are the two main parties in the country's new coalition government formed after last month's parliamentary elections.

According to the Social Democrats, the sweeping tax cuts proposed in the program will make a substantial hole in next year's budget. According to the program, there will be a cut in income tax and cuts to the value added tax in the construction sector and in heating bills, while the non-taxable minimum monthly wage will be increased.

The Social Democrats also criticize Paksas for ignoring Lithuania's extensive agricultural sector. In the program it is written that "up to 10 percent of the state budget" (about 6 million litas) will be set aside annually for agriculture. But a 1994 law states that 10 percent of the national budget (about 9 billion litas) should be reserved for agriculture. The difference implies a decrease in spending of 3 billion litas ($750 million). It is also unclear where this money should be spent.

There is a lot of room for interpretation in the program. Ceslovas Jursenas, co-chairman of the Social Democratic Coalition, said that the program is so general it would allow the government to avoid any specific commitments.

It was widely thought that the Liberals' election victory was the best possible outcome for the free market in Lithuania. However, Jursenas emphasized that the Lithuanian Free Market Institute has attacked some aspects of the program. The institute is considered to be an ideological ally of the Liberal Union. However, the institute's Guoda Steponaviciene says that the presence of the New Union in the coalition has drawn Paksas into embracing a more left-wing agenda.

"The program is very general," she says. "The ideas expressed about lessening the tax burden and regulations in business are positive, but they do not sit easily with the exclusive cuts in VAT. We believe in the idea of equal treatment in business. The VAT is an easy tax to administer, and the cut in VAT for construction is not welcome."

Paksas said last week when presenting the program to parliament that it should be seen only as temporary. A more complete economic plan has been promised after three months.

But for Paksas' critics, the faults in the program are too glaring to be ignored. Some parts of it are incomplete. For example, the section on transport barely mentions the rail network. Sections on policy towards industry and foreign direct investment are extremely brief. It is, according to most observers, less a practical, professionally written plan than a vision.

Few of the new government's ministers contributed to the program. Both the minister of economy, Eugenijus Maldeikis, and the minister of agriculture, Kestutis Kristinaitis, have commented that it is as new to them as it is to the rest of the parliament. Opposition leader and Social Democratic coalition co-Chairman Vytenis Andriukaitis said that the fact that the ministers were not involved in writing the program and have not signed it runs contrary to the constitution.

The conservatives are skeptical about the legalization of gambling, which is specified in the program. Legalization is expected to take place soon. The government is due to debate the issue on Nov. 20.

Meanwhile, many vice ministers from the previous Conservative party administration are to keep their jobs for the time being. The Liberal/New Union coalition is struggling to find professional replacements, which is prompting harsh words questioning the new government's competence.

Like Al Gore in the race for the White House, Paksas' program has been attacked by both left and right for a lack of direction and lack of specifics.