The government's budget proposal was endorsed by most parties in the parliament on Monday, including the Independent Democratic Serb Party (SDSS) and the club of ethnic minorities, while the regional HDSSB party made its support for the budget conditional on the adoption of its amendments seeking more funds for agriculture and the Croatian Democratic Union (HDZ) and the Labour Party said they would vote against the budget proposal.
HDZ leader Jadranka Kosor said the government's budget proposal had poor foundations, that the envisaged cuts in spending were only theoretical, and that the envisaged increase of the general VAT rate from 23 to 25 percent would only mean an additional encumbrance instead of relieving the burden on the business sector and citizens.
She said the HDZ would submit amendments to the budget even though it was aware that they would not be accepted.
Kosor reiterated that budgetary revenues were overestimated by 1.5 billion kuna, while expenses were underestimated by as much. She also objected to planned savings in the public sector to be achieved also by reducing expenses for overtime hours, saying the government was planning restrictions even though it had not started negotiating with trade unions yet.
Prime Minister Zoran Milanovic responded to the HDZ's criticism, saying that the proposed budget was realistic, that the tax burden had not been increased and that the government's calculations were good for Croatia.
Dragutin Lesar of the Labour Party said the party would not support the budget or submit amendments to it.
Neither the budget proposal nor the set of tax bills that was voted in last week have convinced credit rating agencies, "which some call racket agencies, which actually frequently target certain countries and which in our case claim that the Labour Act is the problem and that it should be changed, otherwise our credit rating will go down."
Lesar, too, said he did not believe that new taxes would bring more budgetary revenues and resented the government's having increased its spending by 56 million kuna. He accused the government of lacking the courage to combat the grey economy and deal with companies that were not paying their obligations to the state.
Commenting on the government's plan to change the Labour Act, he called on it to regulate the labour market.
Igor Dragovan of the Social Democratic Party said that with its budget proposal the government was offering a new direction to reverse negative trends and demonstrated responsibility towards citizens, the economy, children and pensioners, as well as international financial institutions.
"The lack of political will, determination and competence marked the budgets of the last eight years, notably the last three when the crisis was already very much present in Croatia," Dragovan said.
