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Slovenia Business Week no. 45: PM Jansa Defends Reforms in the Face of Public Dissent

According to Jansa, the flat tax will be implemented, unless someone offers a better model that will pursue the same objectives

Prime Minister Janez Jansa has shouldered the responsibility for the reform blueprint that the government adopted on Thursday, 3 November. He said the government realised the proposals might be met with disapproval by the public and social partners, but it would be irresponsible if it only put forward likeable measures.

The blueprint, which was adopted unanimously, also includes the most controversial measure, a flat tax rate. According to Jansa, the flat tax will be implemented, unless someone offers a better model that will pursue the same objectives.

Jansa believes that laws dealing with tax and social security will be drafted by this spring, to enter into force in 2007.

"These key acts will be drafted concurrently, so that the parliament gets the big picture when it is taking the tough decisions," Jansa told the press in Ljubljana after the government session.

The government also decided that a full time frame for implementation will be drafted shortly with a view to update the government's plan of work for next year.

The government also decided to set up a cabinet-level department for coordination of the reforms, to be headed by a minister without portfolio.

Jansa did not disclose his nominee for the post. "This depends on the names that will be available, and coordination in the coalition."

The prime minister is confident this is the right time for the reforms. "Slovenia can implement these measures today without having to tighten the purse strings or drastically cut social rights."

Jansa stressed that if these reforms are not carried out in time, Slovenia risks having to take these measures in "considerably harsher circumstances, which would have severe consequences.

Moreover, he said, the reforms are on time in the EU framework, as they coincide with measures taken in Europe to implement the Lisbon Strategy.

Jansa promised broad public debate about the proposals. In particular, the government will coordinate the measures with social partners if they fall within the scope of social dialogue.

One part of the package is the privatisation of state-owned companies. Jansa said the government decided to set up a working group which will submit its proposal to the government by the end of the year.

Moreover, the Institute for Macroeconomic Analysis and Development (IMAD) has been told to find a contractor who would design a simulation model measuring the effects of the proposed reforms that could not be calculated so far.

Source: Slovene Press Agency STA

Author: STA