The new government submitted to the Parliament for consideration draft of the 2013 state budget, setting next year’s budgetary revenues at GEL 7.43 billion and expenditures at GEL 7.33 billion.
The draft may be subject to further revision before the Parliament approves it in December.
The draft budget projects real GDP growth to be 6% next year with nominal GDP expected to reach GEL 29.29 billion.
The draft budget targets tax revenues to be GEL 6.92 billion in 2013, a 9.8% increase from 2012, including GEL 3.38 billion from value added tax; GEL 1.8 billion from income tax; GEL 930 million from profit tax; GEL 663 million from excise tax; GEL 104 million from import tax (customs).
According to the draft, the government expects tripling of income in dividends from state-owned enterprises to GEL 151 million next year.
Projected income in state coffers from financial penalties is going down from this year’s GEL 100 million to GEL 50 million next year.
According to the draft, financing of external debt service will more than double from this year’s GEL 298.8 million to GEL 665 million in 2013.
The proposed draft cuts funding for President’s administration, as well as significantly reduces president’s discretionary fund; there will also be a huge funding cut for the National Security Council (NSC).
This year NSC is receiving GEL 24.78 million of which GEL 1.12 million is allocated for salaries of NSC staff of 38 personnel.
GEL 23 million in NSC’s funding is allotted under the line item “measures for national security policy.”
This line item and its funding is removed from the 2013 draft budget and NSC will receive only GEL 1.8 million next year of which GEL 1.17 million is allocated for its staff salaries.
There will also be a significant cut in financing of “the fund for implementing projects in Georgian regions” – the fund will receive next year GEL 150 million, instead of this year’s GEL 357.9 million.
According to the draft budget, funding of all nine provincial governors will also be reduced.
President Saakashvili’s United National Movement party slammed these funding cuts as “politically motivated”, saying that these cuts are targeting those institutions which are not controlled by the government.
Funding of government’s administration will be increased from this year’s GEL 10 million to GEL 13.6 million and government’s reserve fund will remain unchanged at GEL 50 million next year.
Funding of the Parliament, which is now located in Kutaisi, and some other institutions under its subordination (like National Library) will be increased from this year’s GEL 39.1 million to GEL 39.8 million.
According to the draft out of 20 ministries, funding of 10 ministries will be increased; budgets of eight ministries will be reduced and funding of the two ministries will remained unchanged:
- Ministry of Healthcare and Social Protection – GEL 2 billion in 2013 (2012 – GEL 1.809 billion);
- Defense Ministry - GEL 690 million (2012 – GEL 676.5 million; 2011 – GEL 711 million; 2010 – GEL 728 million);
- Interior Ministry - GEL 585.2 million (2012 – GEL 585 million; 2011 – GEL 568 million; 2010 – GEL 549.2 million);
- Finance Ministry – GEL 100 million (2012 – GEL 118.2 mln);
- Ministry of Economy and Sustainable Development – GEL 70.5 million (2012 - GEL 134.2 million);
- Ministry of Regional Development and Infrastructure – GEL 855.3 million (2012 - GEL 982 mln);
- Ministry of Energy and Natural Resources - GEL 118.26 million of which GEL 37.46 million is foreign grants and GEL 71.8 credits. (2012 - GEL 290.1 mln);
- Justice Ministry - GEL 67 million (2012 - GEL 54.1 mln);
- Ministry in charge of prison system – GEL 170 million (2012 – GEL 124.9 mln);
- Foreign Ministry - GEL 76 million (2012 – GEL 83.5 mln);
- Ministry of Education and Science – GEL 640 million (2012 – GEL 600.6 mln);
- Ministry of Culture and Protection of Monuments – GEL 67.8 million (2012 – GEL 92.7 million);
- Ministry of Sport and Youth Affairs - GEL 47 million (2012 – GEL 59 million);
- Ministry of Agriculture - GEL 218.9 million (2012 – GEL 148.9 million);
- Ministry of Environment Protection - GEL 21.5 million (2012 – GEL 23.8 million);
- Ministry of Internally Displaced Persons from the Occupied Territories, Accommodation and Refugees - GEL 48 million (2012 – GEL 38.1 million);
- Office of the State Minister for Reintegration Issues – GEL 1.3 million (2012 – GEL 1.2 million);
- Office of the State Minister for Integration into European and Euro-Atlantic Structures – GEL 2.3 million (2012 – 2.3 mln);
- Office of the State Minister for Diaspora Issues – GEL 850,000 (2012 - GEL 850,000).
- Office of the State Minister for Employment – GEL 1 million (2012 – GEL 950,000); the government plans to abolish this ministry;
According to the government it would increase minimal monthly pension from next year; details, however, have yet to be elaborated.
Funding of the Ministry of Healthcare and Social Issues will be increased from this year’s GEL 1.8 billion to GEL 2 billion next year and of this GEL 2 billion, the ministry plans to allocate GEL 1.49 billion for funding pensions and various social assistance programs, an increase from this year’s GEL 1.38 billion.
According to the draft the Ministry for Healthcare and Social issues plans to allocate GEL 450.5 million for healthcare programs of which GEL 324 million will be for state-funded health insurance programs, an increase from this year’s GEL 174 million.
The amount of transfers for the autonomous republics and local self-governments from the central budget will be decreased from current GEL 832 million to GEL 770.1 million in 2013. The funding of the South Ossetian provisional administration has also decreased from current GEL 7.8 million to GEL 6 million next year.
Although PM Bidzina Ivanishvili said on November 2 that funding of the Tbilisi municipality from the central budget would be decreased by GEL 100 million, the proposed draft envisages increase in funding from current GEL 445 million to GEL 448.4 million next year.
Georgia will hold presidential elections next year and for that reason funding of the Central Election Commission (CEC) will remain high – GEL 42 million; it, however, is GEL 6.3 million less than CEC’s 2012 funding.
Funding of the Public Defender’s Office has also decreased from current GEL 2.16 million (of which GEL 165,000 is in foreign grants) to GEL 1.8 million in 2013.
Funding of the Georgian Public Broadcaster will decrease from current GEL 49.6 million to GEL 31.8 million in 2013; this planned significant decrease is probably related to uncertainty surrounding GPB’s Russian-language PIK channel.
According to the draft budget, the Georgian Orthodox Church’s funding will increase from this year’s GEL 22.8 million to GEL 25 million in 2013.