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Trade Unions Demand Higher Maternity, Unemployment Benefits in Next Year's Budget

Image: knsb-bg.org

Тhe Confederation of Independent Trade Unions in Bulgaria (CITUB) held meetings with GERB and the Bulgarian Socialist Party (BSP) here on Tuesday and Wednesday to discuss next year's State budget. CITUB's general position is that unemployment and maternity benefits should be increased. 

Meeting with GERB 
CITUB demanded an increase of the welfare benefits for rearing a child under the age of two, and unemployment benefits during the state budget consultations with the parliamentary group of the ruling GERB party on Tuesday evening. CITUB said their demands should be reflected in the 2019 Public Social Insurance Budget Bill between its first and second reading in the National Assembly.

Emerging from the meeting, CITUB President Plamen Dimitrov told journalists that both the minimum and the maximum unemployment benefit should be raised. He sees no point in increasing the maximum contributory income without increasing the maximum unemployment benefit, which, he said, should be 60 per cent of the maximum contributory income. As for the minimum unemployment benefit, it should be raised from 9 to 12 leva a day, which requires 12 million leva in additional allocations, Dimitrov said.

The benefit for the second year of maternity should be increased by 40 leva a month, which would mean 17 million leva in extra spending.

The union warned that several systems will remain underfunded. Agriculture, for one, needs 10 million leva in additional funding which should be shared between the Irrigation Systems Company, the Executive Agency for Hail Suppression and the Agricultural Academy so that their employees can get a 10 per cent pay rise.

An already promised pay rise in the performing arts will require 20 million leva in extra funding, the CITUB went on to say. A higher income increase of at least 15 per cent is needed in the social services sector, the union argued.

Dimitrov reiterated CITUB's view that the proposed state budget for 2019 is the best one so far under the three governments of Prime Minister Boyko Borissov since 2009, given that expenditures are being increased by more than 5 billion leva compared with this year. Dimitrov added, however, that the proposed distribution of the revenues leaves something to be desired. He recalled the union's disapproval of the flat tax.

At the consultations, the CITUB clearly supported the spending increase for social purposes, healthcare and education as well as a planned 840 million leva rise in funding for the public-financed systems, which is about 80 per cent of the 1.1 billion leva demanded by the union this summer.

GERB MP Menda Stoyanova, who chairs the Budget and Finance Committee in the National Assembly, said at the news briefing that this is the first time that the trade unions are happy with the expenditure side of the state budget. Possibilities and reserves will be examined to fulfill the demands, Stoyanova said. "Obviously, if you want to increase one item in an itemized budget, it will come at the expense of another item," she said.

Stoyanova noted that differences of opinion remain on the matter of taxation. The differences are of fundamental nature but there is good reason to expect that the current tax system can produce even such substantial revenues as those planned in the budget scheme, she argued. This will be partly ensured by bringing more of the shadow economy to light and by the good work of the revenue agencies.

"I hope the protestors hear that the 2019 state budget is one of the best," Stoyanova said, noting that the scheme has additional funding both for welfare purposes and for the working people, as well as for key sectors like healthcare and education. 

Meeting with BSP 

The Confederation of Independent Trade Unions (CITUB) and the Bulgarian Socialist Party (BSP) share the view that the change in the tax system is imperative and the transfer of tax burden from labour to capital is more than necessary, CITUB President Plamen Dimitrov and BSP leader Kornelia Ninova told journalists after consulting on the budget at the National Assembly on Wednesday.

The trade union also presented its demands for an increase of unemployment and maternity leave benefits, as well as those for caring for children in the second year of maternity leave.

While CITUB suggests the minimum employment benefit to be raised to 12 leva, BSP suggests 16 leva and will table this proposal between first and second reading of the State Public Insurance budget. CITUB wants mothers to receive 40 additional leva during the second year of maternity leave, while the BSP demands benefits equal to the minimum wage.

Today the Socialists will also table a proposal for reduction of VAT on medicines and bread, as well as one for a waiver of the tax on old cars. CITUB, however, does not believe this to be an essential matter. Ninova argued that the resulting 20 million leva could not resolve the problems in the state considering the current poverty. In turn, Dimitrov explained that the focus should not be on how to tax capital but how to tax capital better and that should be a better application of a dividend tax, not tax on old cars.

The sides do not agree on expenditure policies either, for CITUB says this is the best budget for the time Boyko Borissov has been in office, while Ninova declared that could not be so considering 12 social payments have been shelved, particularly such related to the demographic catastrophe. The expenditure in the budget has been increased, but the question is what its effect will be, she commented. It is important to provide an anwer to how this expenditure will improve things in the health care sector and how it will reduce inequality. 

CITUB is against flat tax. Dimitrov explained the tax system in Bulgaria has led to a large difference between poor and wealthy, with an eightfold difference in labour remuneration. Salary raises are a measure to tackle inequality and that is a fact in the budget. CITUB wanted a 1,100 million leva increase of costs for staff, but the government approved 832 million, which is relatively good, he commented. He recalled his trade union's position that there are underfinanced systems such as agriculture and the performing arts.

CITUB says about 40 per cent redistribution of GDP through the budget is necessary, which brings it closer to the general view of the BSP that more redistribution is necessary to better fund social systems like education and health care.

As regards the pension policy, CITUB finds there is a general stabilization in the total revenue of the Public Social Insurance budget. They expect about 700-750 million more in this budget, but these will be insufficient to make the necessary increase of pensions possible. The 5.7 per cent increase planned to date will have already been consumed by inflation upon receipt and pensioners will largely not be compensated for the developments on the market or the increase of prices, Dimitrov said.

BSP's leader Ninova thanked Dimitrov's team for commending her party's Vision for Bulgaria platform, which she described as a strategic document of higher importance than the annual budget.


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