On Friday, October 26 2018, the Croatian Government held a special session on the island of Hvar, where it adopted a series of important measures for islands and tourism.
The Croatian Government submitted to parliament the final draft of the Law on Islands, whose aim is to create the conditions for the demographic and economic revitalisation of islands and their self-sustainability and self-sufficiency. “The goals of the new law are to manage the island policy and sustainable development of islands, improve the living conditions and achieve demographic and economic revitalisation, self-sustainability and self-sufficiency on what we call smart islands,” said Minister of Regional Development and EU Funds Gabrijela Žalac, pointing out the importance of projects which can be funded from various sources, including EU funds.
The smart island is an island which, through the use of appropriate tools and innovative solutions, is developing environmentally-friendly and in a socially, technologically and economically sustainable way, based on the circular economy and with an increasing self-sufficiency and resistance to climate change.
The minister said that the key provisions of the new law were the introduction of the concept of “islanders” and “islandness,” and a new model categorising islands, as well as a new approach to the strategic planning of island development.
One of the new provision is the introduction of island coordinators whose activities will be funded by the Ministry of Regional Development through county development agencies. They will ensure joint preparation and implementation of projects on islands, the minister said. The island coordinators will be tasked with organising, launching and coordinating plans and projects important for the sustainable development of islands.
The use of an existing island card will be extended to ensure that all rights are coordinated from one place. The law also encompasses measures for subsidising public sea and road transport, the free crossing of bridges, and equalizing the prices of water on land and on the islands for households and businesses.
Žalac also pointed out measures for encouraging social entrepreneurship which can also be financed from European funds, for removing waste from the island, as well as for solving the current problems with wild animals and the removal of invasive foreign species.
The new law, introduced after 20 years, defines an island as an area with developmental specificities and introduces the notion of “islandness” – a set of geographical, social, historical, economic and ecological specificities derived from being surrounded by the sea. The law allows for stronger involvement of all stakeholders in the development of islands, especially those at the local level, in adopting and suggesting island-oriented policies.
Introducing the law, Prime Minister Andrej Plenković said that the law would stimulate the demographic and economic revitalisation of islands.
Minister Žalac also submitted a report on the effects of the implementation of the current Law on Islands, saying that last year a total of 1.7 billion kuna was invested on the islands. Croatia has 1,244 islands (50 inhabited), which represent 5.8% of the land area, in seven coastal island counties with 59 local self-government units. The coastal sea covers 31,500 square kilometres.
Croatia and Finland are the only two European countries which have a law on islands. Given the constitutional definition of islands as an area of special interest, the state co-finances, among other things, maritime links between the islands and the mainland and links between islands, their water supply and transport infrastructure. “Overall, from 2004 to 2017, over 21.8 billion kuna was invested in the islands," said Žalac. The state has invested the most in the economy and measures that contribute to the development of the economy, more than five billion kuna, followed by traffic connections and infrastructure.
Also on Friday, the government sent to the parliament three tourist laws – on tourist boards, on tourist board membership fees, and tourist tax.
Tourism Minister Gari Cappelli said that the main objective of the new Law on Tourist Boards and Promotion of Croatian Tourism is the establishment of a new system of tourist boards, based on the principles of destination management, which significantly changes the goals of boards at all levels. “We are encouraging tourist boards to merge, as well as to establish joint tourist boards for multiple units of local and regional self-government,” Cappelli said.
According to the proposal, the tourist board system will consist of local tourist boards, regional tourist boards, the Zagreb City Tourist Board and the Croatian Tourist Board (HTZ).
Tourism Minister said that the new law also introduces a significantly higher degree of transparency in the activities of tourist boards and better promotion of destination tourist products. One of the provisions of the new law is the possibility for the president of a local or regional tourist board to be appointed by the relevant mayor or prefect. Until now, mayors and prefects were automatically named presidents of their tourist boards.
It is also proposed to limit the share of gross employee wage costs to 30 percent of the total tourist board revenues. The current practice has shown that the costs of gross salaries of employees in some tourist boards amounted to up as much as 90 percent of total revenues.
Presenting the proposal of a new law on tourist board membership fees, Cappelli emphasized that the law would reduce the administrative burden and costs to businesses, and would bring about a fairer model for allocating funds. The new law reduces the number of payers of tourist board membership fees. As many as 21 business sectors will no longer have to pay the fees, while 12 sectors will see their fees reduced.
According to the proposal, for example, tourist membership fees would no longer be paid by businesses in sectors such as maritime and coastal freight transport, water transport services, accounting, bookkeeping and auditing services, and photographic businesses, translation and interpreter services, artists, fitness centres and other sports facilities, hairdressers and beauty salons, etc. However, according to the new proposal, banks would have to pay tourist board membership fees, given that they see an increase in income during the tourist season.
The law also reduces the number of rates for calculating the membership fees from 28 to 5. Private renters and family farms will pay the fee in a lump sum and will be able to choose whether to do it in one or three annual instalments.
The government also adopted the law on tourist tax, which changes the “sojourn tax” into the “tourist tax.” As one of the most important provisions of the new law, Cappelli cited decentralisation. So far, the government's regulations have imposed the amount of the sojourn tax. The tourist tax will now be determined by the county assemblies.
Cappelli also pointed out that more funds would be allocated to regional self-government units, which will get five percent more money. According to the proposed law, from the funds collected from the tourist tax, 2.5 percent will be allocated to a special HTZ account for development projects and programmes in underdeveloped tourism areas, while two percent will go to a special HTZ account for projects and programmes of united tourist boards. Of the remaining funds, 65% will go to local tourist boards, 30% of which will be allocated to the municipality or town in which the local tourist community is located, 15% to the regional tourist board and 20% to the HTZ.
After the session, a series of agreements important for islands were signed. Numerous contracts and decisions on financing island projects were also signed. Prime Minister Andrej Plenković pointed out that “the total value of these projects is about 5.6 billion kuna, and some of these projects will be implemented over the next ten years.”
The Ministry of Maritime Affairs, Transport and Infrastructure signed contracts for the construction of a ferry dock in the port of Kaprije and the extension of the external dock in Sućuraj, as well as an agreement on the extension of the port at Unije.
The Ministry of Regional Development and EU Funds signed an agreement on grants for Lastovo Islands Nature Park, historical gardens of the Dubrovnik area, and the cultural route in Zadar County.
The Ministry of State Property signed agreements for the use of the fortress of St. George by the Town of Vis, for the use of two apartments in Komiža by the Town of Komiža, on giving use of a building in Postira for a retirement home, and for giving state-owned property to the Municipality of Tribunj.
The Ministry of Administration signed agreements on the introduction of e-registry in Supetar, Stari Grad, Jelsa, Bol, Sućuraj, Sutivan, Okrug, Šolta.
The Ministry of Science and Education signed an agreement on providing a grant to the University of Split.
The Ministry of Agriculture announced four decisions approving projects from investments in wineries and marketing for Vrbnik, Blato 1902, Madirazza and Dingač-Skaramuča.
The Ministry of Construction and Physical Planning signed grant agreements on the energy restoration of a sports facility in Rab, for energy restoration of the Vela Luka retirement home, for the energy restoration of primary and secondary schools in Vis, and for the energy restoration of a local kindergarten.
The Ministry of Administration announced that the Town of Hvar can use the proposed coat of arms and flag.
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