The deficit in the state budget can be limited by reducing expenses, not by increasing the tax burden. This was stated by the chairman of the General Assembly of the AIKB Vasil Velev in the program “The Day Live” on NOVA NEWS.
He commented on the state of public finances, the pension system and the need for reforms. “The previous government was overthrown by itself. The AIKB came out on the square together with many other people. The main reason was that the proposed budget was digging deep into the people's pockets in order to pour money into unreformed budget systems and projects with questionable efficiency”, said Velev.
According to him, an attempt is currently being made to show the real state of public finances, without hiding the problems. “For the first four months we have a 12.4% growth in revenues, and at the same time a 34% growth in maintenance costs and a 19.2% growth in personnel costs. Salaries should have increased by 5%, and expenses have increased by 19.2%. More money has been spent than the law allows”, emphasized the chairman of the General Assembly of the AIKB.
Regarding the new budget, he noted that the positive thing is the lack of an increase in the tax burden. “This huge deficit, in our opinion, can be smaller. We must seek reductions in expenses. The large growth that has already been registered should not continue in the coming months”, said Velev.
According to the chairman of the AIKB, the pension system needs reforms in order to restore the connection between the social security contribution and the size of pensions. “The rule of pensions being in line with social security contributions has been violated. This is unfair and stimulates the shadow economy. When it doesn't matter what social security contributions you have paid, a person gets an incentive not to pay them”, he pointed out. And he added: “There should be no minimum pension at all. We are not talking about reducing or freezing pensions, but about slowing down their growth so that it is adequate to the wages paid in the economy. If pensions are increased with loans, this is not sustainable and leads to a catastrophe”.
He also commented on the proposal to change the ratio of social security contributions. “Not only civil servants and those in the judiciary, but also employees under the Defense Act and the Ministry of Interior should pay social security contributions. There is no reason to postpone this”, Velev said.