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Thursday, 02 August

Press statements by Prime Minister Viorica Dăncilă on the first budget revision of 2018

Viorica Dăncilă: Good evening! I will present the first budget revision of 2018. The most important information on this subject is that we have a positive revision, which indicates a good evolution of the economy. Following the first seven months, the estimate of revenues to the general consolidated budget for this year rose by nearly 6 billion lei compared to initial forecasting. If we draw a comparison with past year, we notice that at the first budget revision of this year, we have a much more larger amount, five times more than in 2017. As regards the evolution of the gross domestic product, as compared to initial estimate, after the first seven months this year, the specialists appreciate that GDP will rise this year up to 945 billion lei, by 37 billion more that we estimated at the outset. As regards the budget deficit, we maintain the 2.97 percent target of GDP, therefore, below 3 percent threshold undertaken to EU. I know that similar to last year, several doubts were expressed publicly over the Government’s capacity to maintain this target. This is why I mentioned that seven months after, the deficit stands at 1.3 percent of GDP, which offers us enough space for observing the initially assumed target. Before presenting you the way the budget surplus has been allocated, I would like to present you the principles we took into account when making this revision. First of all, to dispel all rumors artificially fuelled regarding money for pensions and wages, I want to tell you that following revision, the amounts necessary to pay the pensions and wages are fully ensured by the end of the year. I therefore request the pensioners to take into account the official data presented by Government and the competent institutions and I assure them that the pensions we have just increased,  have full coverage in the budget. Other principle was to ensure all the amounts necessary for investment projects we committed to carry through this year. Also, we provided the budget and commitment appropriations necessary to back the business environment, especially through aid schemes and state guarantees. There were also cuts in the budgets of some institutions, we have reduced however only where there is a low use of the money allocated. If they were unable to spend the money at their disposal, we considered it better to take this surplus and allocate it as a priority to healthcare, education and investment. With respect to the pension budget, this was supplemented by more than 850 million lei. We took into account the latest legislative amendments adopted in Parliament with respect to recalculation of pensions for those who worked in hazardous conditions, so that there is equality between the pensioners of these occupational categories, irrespective of the period when they retired. The healthcare, priority field in our vision of government benefitted of a large supplement of 891 million lei, the largest part of this sum being allocated for the purchase of medical equipment.

From this surplus, we will purchase 300 incubators for maternities, 300 hearing aids for newborn babies, and other equipment for mothers and children.

We also allocated the necessary amounts to carry out the project unfolded in cooperation with the World Bank to purchase equipment for the emergency units, magnetic resonance imaging devices and CT scanners, as well as screening equipment for early detection of cancer. We also allocated additional amounts for public health programs and for projects with non-reimbursable external funding.

As regards the education, the second priority area of ​​the programme for government, we allocated an additional amount of 178 million lei. This money will be used to pay scholarships, to pupils and students and also for investment in educational units. Also for universities, money was allocated for the construction of a university aula and a conference hall at the Polytechnic University of Bucharest, the completion of the C Building at Valahia University in Targoviste, as well as the completion of the central office of the University of Pitesti. In the field of agriculture, where we included the National Sanitary Veterinary Authority too, we allocated an additional amount of 185 million lei. I emphasize, however, that we provided in the budget an amount of over 110 million lei to combat and eradicate the African swine fever. This money will also be used to compensate farmers.

We also provided the amounts necessary for diesel fuel payments for agricultural works. We will also start investing in 37 pumping stations needed to expand irrigated farmland. A large amount has been allocated to local authorities. Here we have an additional 1.1 billion lei to maintain the local communities revenues at least at the level of 2017, and to provide the necessary money for the program food for pupils. To this adds another amount of 300 million lei for investments through the National Programme for Local Development, I refer to PNDL 1 and PNDL 2, money that will be allocated to local communities through the Ministry of Development, especially to extend the water and sewerage networks and to rehabilitate county and countryside roads. It is for the first time in the last four years that the Transport sector will receive extra money at budget revision. The additional amounts are intended to back investment projects in the transport infrastructure, but also for the purchase of a flight simulator for the Aviation School.

The amounts necessary for completion of the upgrade of DN 18, Baia Mare –Sighetu Marmatiei –Iacobeni road section, are provided in the budget. We will also allocate the amounts needed for the completion of Agigea-Constanta Bridge, construction of the bridge over the Vedea River, starting complex works on the Ramnicul Valcea – Vâlcele railway, work lagging behind for more than 15 years. Also in the field of investments, we budgeted 21 million lei to prepare 21 investment projects through public –private partnership in transport infrastructure, healthcare, agriculture and tourism. We allocated an extra amount of 366 million lei for the Internal Affairs Ministry, to purchase equipment and means of intervention and terrestrial mobility for Gendarmerie and Police, and also to ensure salaries for nearly 8,000 positions for police agents and non- commissioned officers. We have important extra funds for the “Rabla”(Car scrappage) program, on granting other 30,000 vouchers for car purchase, thus, we will reach 50,000 vouchers allocated this year for “Rabla” program double than in 2017.

At the same time, we start a program for the upgrade of household appliances to encourage the purchase of energy-efficient appliances. We have secured the financial resources for all state aid schemes adopted by the Government for the population and the business environment. An additional amount of 250 million lei was allocated here to support the state aid scheme for investments higher than EUR 3 million for the "Invest in yourself" program, on granting interest-free loans to Romanians, and for the return of the excise duty on diesel to carriers. We will also provide at this revision commitment appropriations of 1.8 billion lei for the following programs: the Start-Up Nation program, the second session benefiting young entrepreneurs and which provides a financing of 200, 000 lei for each business project; the programme backing the film industry, which will start on September 1 this year, and which implies covering up to 45% of the costs of films produced in Romania.

The “Growth” programme, investing in children, investing in the future, whereby we grant an aid of 50 percent of the value of the project for the construction in private regime of 2,000 maternities and kindergartens, including Olympic kindergartens. The ‘Growth” programme – we invest in the housing service, whereby we will grant a 50 percent aid from the value of the project for companies to build housing for their own employees. The “Growth” programme, 5 star residences whereby we will grant the same 50 percent aid from the value of the project for building luxury residences for elderly people. “The growth” programme – junior savings account, grants a yearly aid of 600 lei. The investment programme in areas with high unemployment whereby we will support business development in counties with low employment rate. Grants of more than 50 percent of the investment value will be awarded to entrepreneurs who create well-paid jobs. Through this budget revision, we allocated to ANAF an extra sum of 278 million lei to upgrade the IT system, purchase equipment for customs personnel and upgrade customs offices at EU border, respectively on the border with the Republic of Moldova, Ukraine and Serbia. As I said at the outset, there were Ministries or institutions where we operated budget cuts. I outline that such cuts were made where we noticed a low degree of spending the amounts that the respective Ministries or institutions had at their disposal. The list that we will present you includes only the main credit release authorities with negative rectification higher than ten million lei. Thank you.

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