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Slovenia Business Week no. 08: Development Office Plans to Draft Bulk of Reform Laws in 2006

Damijan told the press that the office would draft the majority of new acts, regulations and amendments in 2006, while some would be drafted next year

The Government Office for Development, whose task is to coordinate the implementation of economic and social reforms, will take part in drafting 67 measures from the adopted reforms package, Development Minister Joze P. Damijan said on Monday, 13 February.

Damijan told the press that the office will draft the majority of new acts, regulations and amendments in 2006, while some would be drafted next year.

He moreover said that the department's priorities include social transfers, the labour market, health, public finances, taxes, higher education, research and development and competitiveness.

According to Damijan, the office wants to lay new foundations for economic development and encourage companies as well as individuals to be more active.

"The era when the state guaranteed a life-time job to everybody is over. Everybody has to realise that they are responsible for their own destiny. The 'socialist' mindset is history," he said.

The minister without portfolio will take part in drafting and coordinating the withdrawal of state from the economy, promoting technical development and the tax reform.

The amendments to the personal income act, which would introduce flat tax, should be passed by September.

Damijan also expects that the changes to the VAT act, which would introduce flat tax, would also be passed by September.

"We are adamant about introducing flat tax in VAT, but it is of course the cabinet's decision to make" he pointed out.

Damijan also outlined the privatisation proposals of government-appointed expert groups for Slovenia's largest and second largest banks, the NLB and NKBM, the country's largest insurer, Zavarovalnica Triglav, and the national telco Telekom Slovenije.

"All of the groups have followed the recommendations of the office, calling for a 26XY model of privatisation where 26% remains in the hands of the state, X goes to strategic owners and Y to portfolio investors," he explained, but did not specify the proposals in more detail.

Meanwhile, head of the social reforms and development sector Lidija Apohal Vuckovic said that the bulk of measures in the hands of the sector would be drafted by the end of the year.

The first measures in the field of social transfers, expected by the end of March, will bring stricter conditions for handing out social security and call for greater activity of its recipients, Apohal Vuckovic revealed.

The more complex measures, such as unifying the system [of social transfers] and introducing bonuses, would be drafted by November and passed in the beginning in 2007, she added.

Some changes to the pension system are also expected to be drafted in the first quarter, while the bulk of changes to the health system are expected in the third quarter of 2006.

The head of the economic reforms sector Bostjan Vasle said that his sector's main task would be drafting a proposal for decreasing public expenditure by 2 percentage points by 2008.

Capital markets reform legislation, intended to aid privatisation, will be drafted in the second half of the year, Vasle added.

Damijan also pointed out that the reforms would bring high economic growth to Slovenia, but it is impossible to specify exactly when.

According to simulations by the government Institute for Macroeconomic Analysis and Development (IMAD), the reforms would decrease the number of unemployed by 15,000 as well as generate 50,000 additional jobs by 2010, he explained.

Source: Slovene Press Agency STA

Author: STA