ZAGREB, November 1, 2019 - A 2020 draft budget, outlined by the government on Thursday, plans 145.1 billion kuna on the revenue side and 147.3 billion kuna on the expenditure side, and a majority of government departments can expect a rise in their funding from the state budget.

The largest individual outlay from the next year's budget, 47.8 billion kuna, is planned for the ministry of labour and pension system, which means that it will get 4.7% or 2.1 billion kuna more than in 2019.

Finance Minister Zdravko Marić explained that 42.6 billion kuna would be set aside for pensions in 2020.

The second biggest recipient is the finance ministry, 43.6 billion kuna, or 4.4% more than what it received from the original budget for 2019.

The budget outlays for the science and education ministry are budgeted at 18.6 billion kuna in 2020, up by 7.6% or by 1.3 billion kuna in comparison to the original budget for 2019.

The health ministry is to get 12.4 billion kunminia, which is a rise of 5 percent compared to its budget funding in 2019.

The projected budget outlays for the ministries of defence and interior stand at 5.3 billion kuna (up 5%) and 5.9 billion kuna respectively.

The tourism ministry can expect the biggest increase, 29%, in the funding which is budgeted at 258 million kuna in 2020.

One of the few ministerial departments with a drop in the funding from the state budget is the agriculture ministry, and it can expect the lowering of its sum by 4% to 7.4 billion kuna. The ministry for the management of state property can expect a 10-percent decline in the funds from the state budget to 72.1 million kuna.

The government plans 6.7% higher revenues in the draft 2020 budget in comparison to the original 2019 budget, that is 5.4% more in comparison to the revised 2019 budget, which was also tabled to the parliament on Thursday.

The expenses in next year's budget are higher by 5%, that is by 7 billion kuna, in comparison to this year.

More budget news can be found in the Politics section.

ZAGREB, October 17, 2019 - Ivan Šuker, a lawmaker of the ruling Croatian Democratic Union (HDZ), said in parliament on Thursday that, whether someone liked it or not, the fact was that the HDZ was restoring the statutory retirement age to 65.

Šuker criticised opposition members of the parliament who he said had rushed to sign the referendum petition launched by the trade unions' "67 is too much" initiative, while they are going vote against the government-sponsored proposal to reinstate the statutory age for retirement at 65.

If you do not vote for the law on Friday and if we do not support the law unanimously, this will mean that you have not told the truth to Croatian citizens, the HDZ MP said in his address to the opposition lawmakers who fiercely criticised the government-tabled law whereby the statutory retirement age will be 65 and penalisation for early retirement will be made milder.

Labour and Pension System Minister Josip Aladrović said earlier in the day that the government had respected the demands of some 750,000 citizens who had signed the referendum petition.

On the other hand, some of the opposition lawmakers criticised the government's decision, with Mirando Mrsić of the Democrats party insisting on separating the allocations for pensions under special schemes from the general pension fund.

The opposition MPs who participated in the discussion said that the collected signatures during the "67 is too much" campaign were the expression of the general public's disapproval of the policy pursued by the ruling HDZ.

Branko Hrg of the HDS party, a junior partner in the ruling coalition, said that disrespecting the will of the citizens who signed the petition would be insensible.

He also commented on "a political amnesia" and recalled that it was Mrsić who had proposed raising the retirement age to 67 while serving as Labour and Pension System Minister in the SDP government led by Prime Minister Zoran Milanović.

More pension news can be found in the Business section.

ZAGREB, October 16, 2019 - Labour Ministry state secretary Majda Burić informed the parliamentary Labour, Pension System and Social Partnership Committee on Wednesday that the government was withdrawing from procedure amendments to the Labour Act the committee was to have discussed today.

She did not say why the government was doing so.

Committee chair Gordan Maras of the opposition Social Democratic Party said "it's unusual" to do so just before the start of the committee meeting, while Ante Babić of the ruling HDZ said "the circumstances are such, the government is talking with the social partners."

An external committee member noted that this was done without the social partners' knowledge, to which Burić replied that the government acknowledged the social partners, cooperating both with the unions and the Croatian Employers Association (HUP).

Earlier this morning HUP cancelled a scheduled press conference with the explanation that it had been notified by the government that it would withdraw from further procedure a bill of amendments to the Labour Act which regulated the possibility of working for another three years after qualifying for age pension eligibility at 65.

Said bill was part of a pension reform package and we have also been notified that the necessary labour legislation improvements will be discussed through the social dialogue, HUP said.

The government says on its website that it held a conference call on Tuesday at which it decided to withdraw six bills from parliamentary procedure, and that it will discuss the bills with the social partners and then send them into regular procedure.

Prime Minister Andrej Plenković said on Wednesday the government had not capitulated before employers but only wanted additional consultations, adding that it was drawing up laws in citizens' interest.

He was asked by the press why the government had withdrawn six bills from procedure. "We believe we still have time to adopt them in regular procedure."

The government says on its website that it held a conference call on Tuesday at which it decided to withdraw six bills from parliamentary procedure, and that it will discuss them with the social partners and then send them into regular procedure.

The bills envisage amendments to the Labour Act, two laws on civil servants, the Healthcare Act, the law on elementary and high school education, and the law on science and higher education.

Asked if that was done in the interest of unions, employers or someone else, Plenković said it was "in the interest of Croatian citizens."

A member of the press remarked that if he was yielding to employers, he could also raise teachers' salaries, to which he said: "You'll hear everything today and everything will be clear."

Asked if he would receive the striking teachers or if the government's offer of a pay rise which they turned down was still on the table, Plenković said he was always for dialogue.

The Alliance of Autonomous Trade Unions of Croatia (SSSH) on Wednesday welcomed the government decision to withdraw six pension and labour bills from the fast-track procedure and the announcement by the government that it would further consider the bills with social partners and then send them to Parliament for adoption under regular procedure.

SSSH recalled in a statement its open letter to Prime Minister Andrej Plenković in which it said that it would be reasonable and responsible not to pass these bills under fast-track procedure but first to evaluate their effects and envisage a transition period for all or individual activities.

More pension news can be found in the Business section.

ZAGREB, September 27, 2019 - At the end of 2018 four mandatory pension funds had a total of 1.9 million members, which is almost 92,000 more than at the end of 2017 while their net assets increased by 6.2 billion kuna to 98.13 billion kuna, the government heard on Thursday.

The government called on parliament to endorse a report on the operation of the four mandatory pension funds - Raiffeisen, Erste, AZ and PBZ/Croatia Osiguranje - in 2018.

According to data presented by Labour and Pension System Minister Josip Aladrović, at the end of 2018 the four pension funds had a total of 1,936,261 members, 91,989 more than in 2017.

He warned, however, that citizens were poorly informed of the possibility to independently choose a mandatory pension fund.

According to the Central Register of Insurees (Regos), only one percent of citizens chose a mandatory pension fund themselves, and the rest were allocated randomly.

The total net assets of the pension funds at the end of 2018 amounted to 98.13 billion kuna or 6.2 billion kuna more year on year.

"Assets in members' personal accounts in mandatory pension funds continued to grow owing to a continued increase in contributions as well as positive macro-economic circumstances and the average yield on invested funds," Aladrović underscored.

According to cumulative data, the four companies managing mandatory pension funds generated a revenue of 457 million kuna in 2018, which is 23 million kuna more y-o-y while their total expenditure amounted to 211 million kuna. The cumulative net profit of those companies was 202 million kuna, Aladrovic explained.

More news about the pension system can be found in the Politics section.

ZAGREB, September 20, 2019 - Prime Minister Andrej Plenković said during a visit to the northern Adriatic city of Rijeka on Thursday that the government's acceptance of the proposals by the "67 is too much" referendum initiative was an important decision, noting that the pension reform had already had positive effects.

Asked by the press if the government had capitulated to the unions, Plenković said that the government had announced an important decision at its meeting today and that it would submit to the parliament amendments to the Pension Insurance Act as proposed by the "67 is too much" initiative.

"The pension reform is good and positive, it is an important structural reform. During our term in office, pensions have increased by 11 percent, and by nearly 15 percent for low-income citizens. As of January 1 this year, some of the people who have retired could return to the labour market, and data shows that as many as 13,500 people have returned to the labour market. This is a message that there are people who want to work even after they turn 65," the PM said.

He noted that the retirement age of 67, provided for under the present law, was introduced by the SDP government. "I don't remember anyone organising any demonstrations or referendums at the time."

"Our message was that we heard the message of 700,000 citizens, that in these amendments we will deal with what primarily the three union federations see as problematic, and that at the same time we will amend the Labour Act and several other acts that cover special professions to allow those who so wish to work after they turn 65," Plenković said.

"In that regard, I think we have achieved the right balance and closed this issue, and that this reform, which has been assessed by experts from the European Commission and credit rating agencies as very good, ... will resolve the concerns raised," he added.

Asked if Regional Development Minister Marko Pavić, who had claimed while serving as Labour and Pension System Minister that abandoning the pension reform would cost 40 billion kuna (5.4 billion euro), should resign, Plenković said that it should be borne in mind that at that time a projection of financial sustainability over the next 20 years was being made and that amendments to other laws would make it possible for some of the people to work after 65 years of age, which would considerably reduce the costs.

"We will try to keep this fiscal effect as low as possible," the PM said, adding that Pavić had already taken the helm of another government department.

More news on the pension system can be found in the Politics section.

ZAGREB, September 17, 2019 (Hina) - Labour and Pension System Minister Josip Aladrović said on Monday that he did not see any reason for trade unions to call on citizens to take to the streets if a referendum was not called against the pension reform, saying that the matter would be discussed by the parliament.

Leaders of three union federations asked the parliament earlier in the day to call a referendum against the pension reform, otherwise they would call on citizens to take to the streets to ensure that the will of the 750,000 referendum petition signatories is honoured.

"We shall see, the matter is now up to the parliament to decide," Aladrović told reporters before a session of the HDZ party leadership, when asked about the statement by the three union federations.

Aladrović said that signatures for the referendum petition had been counted and sent to the parliament and that the parliament would most probably discuss the matter in the first or second week of its next session, which starts on Wednesday.

"We'll see what the parliament decides," he said.

Parliament Speaker and HDZ secretary-general Gordan Jandroković said that there would be no need for anyone to take to the streets.

"We will act in line with the law and everything will be all right," said Jandroković when asked about the union referendum campaign "67 is too much" and the unions' threats.

More referendum news can be found in the Politics section.

ZAGREB, September 5, 2019 - Labour and Pension System Minister Josip Aladrović said on Thursday the government advocated a horizontal pay rise for everyone and not just some groups.

Speaking to the press before a cabinet meeting, he said there had been several horizontal corrections, with a 11.5% pay rise for everyone over the past two years. "We expect, with a further pay rise and positive economic trends, to correct (wages) for everyone, not just some selected groups."

As for teachers' demands for higher wages, Aladrović said he would hear their demands today and see if any talks were necessary given that branch collective agreements were signed last year and the demands were not related to collective negotiations.

Commenting on healthcare workers' demands for higher wages, he said their branch collective agreement expired on October 31. "We will do our best to arrive at a solution. I think we are close to a solution," he said, adding that what had been initialled would cost 395 million kuna.

Speaking of a national pension, the minister said it would be fully implemented in 2021 and that the legislative framework would be ready by autumn 2020. He said the national pension "will become an element within the pension and welfare systems" and that it was too early to say how much it would cost the state.

There is a group of 53,000 people who will be over 65 in 2021 and have no income, he added.

Education Minister Blaženka Divjak, who approved teacher unions' demands for a 6% wage index increase, before today's cabinet meeting said that it was necessary to open a dialogue between the government and unions.

She said investing in education was an investment, not an expense, adding that the teachers' wage index lagged behind the wage index of other public sector workers and that this "injustice" has to be resolved.

About 1,500 teachers are protesting today outside Government House, demanding a 6% wage index increase.

Finance Minister Zdravko Marić on Thursday said that funds for additional demands by health and education unions had not been foreseen in the sate budget and called for patience until negotiations were concluded.

"We will be asking for some savings to be made during the year on the expenditure side of the state budget in order to secure those funds. There are some ministries that do not have the funds to cover even the 3% base wage increase, while the unions' additional demands weren't planned," Marić said ahead of the cabinet meeting on Thursday.

He added that the health sector was a current topic because the collective agreement had expired. "As of 1 September, the base wage for all public servants was increased by 2%. These are all matters that we are taking into account so that employees can be satisfied," he said, adding that the government was "working so that we all as citizens and taxpayers have a better and efficient service."

He underscored that there are some sections of public administration that have to be re-analysed but "we all need to work on creating positive pressure and a positive environment" and to head in that direction.

Reporters asked if that means that workers in the education sector were the last on the list for their base wage to increase. "No, if anything needs to be changed, we have to advocate a horizontal approach because we cannot neglect any sector of the state administration but look at everything together. No one is first or last," he explained.

He added that negotiations and talks were being held with all sections of state public administration regarding the base wage.

There is no cause for panic but we have to be responsible toward public finances, Marić said.

He added that the base wage had increased by 11% over the past three years and that the government is prepared for further talks.

Asked whether a horizontal wage increase would prevent the strikes that have been announced, Marić said that that decision was not up to him and added that negotiations with the health sector were continuing.

He informed reporters that the three percent base wage increase would cost the government 900 million kuna annually, while an additional 2% would cost an additional 600 million kuna. Anything else above that is a topic for talks and analysis, he added.

More news about the public sector can be found in the Business section.

ZAGREB, September 4, 2019 - A task force led by the Labour and Pension System Ministry is conducting an analysis aimed at preparing the ground for introducing a national pension allowance, the Večernji List (VL) daily reported on Wednesday.

The task force has recently sent invitations to social workers, academicians and pension associations to join it in efforts to prepare a framework for the application of the national pension allowance.

Labour and Pension Minister Josip Aldrović was quoted by the daily newspaper as saying that the task force is expected to outline qualifying criteria for eligibility.

Some experts advise that the term permanent social welfare allowance should replace the term national pension as that allowance is actually a social welfare benefit.

The legislative framework is to be elaborated in 2020, and the allocation of this social benefit is likely to start in 2021.

Persons eligible for this allowance in form of a state pension will be senior citizens with no steady financial income, and currently experts are discussing whether the starting age for receiving the state pension will be 65 or 67.

The number of potential beneficiaries depends on the criteria for eligibility. According to some estimates there can be between 85,000 and 40,000 users of this social welfare benefit.

The introduction of a national pension allowance for elderly citizens in need is one of the pre-election promises of the ruling Croatian Democratic Union (HDZ).

More news about pensions in Croatia can be found in the Politics section.

ZAGREB, August 29, 2019 - The union initiative against raising retirement age, called "67 is too much" has collected a sufficient number of signatures for a referendum to be called about the Pension Act, the Public Administration Ministry advised at a cabinet meeting on Thursday.

The government endorsed the report submitted by the ministry regarding the signature collection procedure and forwarded the report into parliamentary procedure.

The initiative collected almost twice the number of signatures required to call a referendum. The ministry determined that 708,713 valid signatures had been collected.

In order for a pension eligibility conditions referendum to be called, it was necessary to collect at least 373,568 signatures (10% of the total electorate), while the unions have said that they have counted more than 700,000 signatures.

An examination of the number and validity of signatures on a sample of 49,962 voters determined that there are 708,713 valid signatures, state-secretary in the Administration Ministry, Darko Nekić said today.

Parliament now has to decide whether it will call the referendum or whether it will request the Constitutional Court to check the constitutionality of the referendum question.

Signatures were collected for two weeks this spring for a petition for restoring the statutory retirement age from 67 to 65.

More news about referendums in Croatia can be found in the Politics section.

ZAGREB, August 14, 2019 - Three trade union federations which go by the acronyms the SSSH, the NHS and the MHS, said on Wednesday that they would not respond to Labour Minister Josip Aladrović's invitation to talks until the parliament decided to call a referendum against the statutory retirement age of 67.

The newly-appointed labour and pension system minister previously invited trade unions to a meeting set for August 22, "for the sake of further development of social dialogue, cooperation and partnership."

"For the meeting to be held, the key dispute that has lasted for months needs to be resolved. Until the parliament adopts a decision to call a referendum based on the '67 is too much' initiative, the government's commitment to defining and implementing policies and measures for sustainable development through a true social dialogue will remain questionable," the three trade union federations said in a joint statement.

The unions believe that the relationship between them and the government deteriorated additionally in 2018, when the government defined a new pension reform without consultation with trade unions.

That was the reason why unions launched a signature-collection campaign to ask for a referendum on changes to retirement terms.

"That was the reason why the agreement on the establishment of the new Economic and Social Council was not signed, and the government's anti-reform campaign resulted in our demand for the replacement and later resignation of the former minister and for the termination of the old agreement," the three trade union federations said, noting that their decision to walk out of social dialogue did not happen overnight and that social dialogue could not be restored overnight either.

More news about trade unions can be found in the Business section.