Next year's budget will strengthen the country's competitiveness, rule of law and significantly improve social guarantees - Karins

  • 2020-10-20
  • LETA/TBT Staff

RIGA - Next year's budget will strengthen the country's competitiveness, rule of law and significantly improve social guarantees for all workers, Prime Minister Krisjanis Karins (New Unity) saod today at a sitting of the Saeima's Budget and Finance (Tax) Committee.

Presenting the draft state budget for 2021, the prime minister acknowledged that the proposed draft budget has a significant deficit, at the same time emphasizing that it is planned to reduce it annually, and in 2022 is expected to be lower than required by the Maastricht criteria. "We plan to gradually reduce the deficit without reducing spending," the politician said.

Karins emphasized that one of the most important criteria in putting together next year's budget was the need to think about the country's competitiveness. "We looked at tax rates, concluding that the labor tax rate was the most uncompetitive, so it is planned to reduce it. Reducing the labor tax burden will allow us to facilitate the country's competitiveness," said the prime minister.

"The second concept, which is strongly emphasized in this budget, is rule of law and its strengthening," Karins said, also emphasizing that from January 1, the minimum wage will increase from 430 to 500 euros.

The government is also offering the Saeima a project to raise salaries for healthcare works, allocating EUR 183 million for this purpose. "We are also planning a full increase in teachers' salaries, which requires more than 40 million euros," said Karins, reminding that Constitutional Court rulings must also be complied with.

"In the conditions when there is a pandemic and the economy is on a downslide, we offer a budget with additional investments of about EUR 300 million, which corresponds to the basic thesis that the budget should help stimulate the economy," said Karins.

"We offer to continue investing in these pandemic conditions. We are planning a budget deficit. However, such a budget will strengthen the country's competitiveness, rule of law and significantly improve social guarantees for all workers," the prime minister is convinced.

As reported, the Saeima has submitted to parliamentary committees the 2021 draft state budget for review, with expenditures planned at EUR 10.76 billion and revenue at EUR 9.58 billion for next year.