Ministries face spending cuts warns Finance Minister

Take note – story published 8 years and 9 months ago

Government ministries will likely have to cut their basic expenditure in the 2016 budget by 3 percent, Latvian Finance Minister Janis Reirs told the BNS newswire on Thursday evening after the first meeting of a working group established to work on next year’s national budget.

The working group will have to get moving fast, as the budget is due to be delivered to parliament in just six weeks' time.

Reirs said the Finance Ministry’s proposals for a 1 percent, 3 percent or 5 percent cut of ministries’ budgets next year had been discussed at the meeting on Thursday but the final decision will be made during the meeting next Tuesday, August 18.

"The final decision will made at the meeting on Tuesday but we are inclined to agree on a 3 percent reduction,” Reirs said, apparently playing the classic game of offering three alternatives in order to choose the middle one.    

The finance minister said that the proposal for a 3 percent reduction of the ministries’ budgets had been discussed also with Prime Minister Laimdota Straujuma. He explained that the cuts would not apply to salaries and any other expenditure items that could not be slashed, such as the contributions to the EU budget, debt service costs and contributions to international organizations, but administrative expense, fixed assets and capital expenditure would have to be reduced.

According to the estimates, a 3 percent reduction would bring an additional 15 million euros to the 2016 budget, Reirs said.

Earlier on Thursday Reirs announced that the Finance Ministry was going to propose to other ministries a 1 percent, 3 percent or 5 percent cut of basic expenditure in their 2016 budgets. But the ministries in charge of four prioritized sectors - defense, internal security, health and education - would be exempt from the spending cuts.

It is planned that the draft 2016 budget will be submitted to the parliament on September 30, 2015. The government has also committed to keeping the budget deficit below 1 percent of GDP.

Seen a mistake?

Select text and press Ctrl+Enter to send a suggested correction to the editor

Select text and press Report a mistake to send a suggested correction to the editor

Related articles


Most important