Cash to tackle Latvia's demographic challenge

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Some EUR 12 million could be allotted for demographic measures next year, Finance Minister Dana Reizniece-Ozola told the LETA newswire September 4.

Last week, coalition partners were unable to reach agreement on the 2018 state budget as the National Alliance demanded around EUR 85 million for demographic measures next year.

However, as the so-called 'fiscal space' in 2018 is estimated at approximately EUR 80 million, this proposal was seen as unrealistic by other parties.

Coalition partners agreed September 4 that an additional EUR 12 million could be allotted for implementation of demographic programs in 2018, said Reizniece-Ozola.

According to the minister, this amount is meant to double benefits for every third child in a family, from EUR 34.14 to EUR 65.86, and increase benefits for the fourth and subsequent children from EUR 50.07 to EUR 65.86. More money could be allotted to demographic measures in 2020.

"This will be substantial support for families and a signal that the support program for families will be implemented. And this is a reasonable and fiscally-responsible proposal because right now we cannot support proposals that deal with revising taxes or duties, especially so given our recent promise not to raise taxes for budget revenue purposes," said Reizniece-Ozola.

"We must not succumb to pre-election populism, the wish to allot more funds than we can afford, taking into consideration that healthcare is our priority next year," Reizniece-Ozola said.

Several proposals were on September 5 introduced by lawmakers to procure money for demographic measures. One such, put forward by MP Imants Parādnieks (National Alliance) proposes organizing a receipt lottery mirroring that of Taiwan, Portugal and other countries.

He also proposed reducing child support payments by the state, arguing that the minimum wage was raised steeply.

Another proposal would see asking people for €5,000 payments to extend their residency permits.

Also on September 5 Saeima speaker Ināra Mūrniece (National Alliance) told LTV that a new tax could be levied on payday loan companies. 

Latvia is faced with a rapidly ageing population and birth rates falling significantly short of death rates. In addition large-scale emigration has exacerbated the demographic challenge.

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