OREANDA-NEWS. June 15, 2009. The political parties forming the Government, the Free Trade Union Federation of Latvia, the Latvian Employers’ Confederation, the Latvian Association of Local and Regional Governments, the Latvian Chamber of Commerce and Industry and the Latvian Pensioners Federation have agreed on a 2009 budget deficit reduction in the amount of 500 million LVL, including, reported the Official website mk.gov.lv:

A. Measures aimed at increasing the budget revenues:

Increasing revenues from dividends by obliging state-owned capital companies to contribute 80% of their profits in the previous year to the state budget, except for Latvenergo which shall contribute 100% (the revenues increased by 8.8 million LVL).

Increasing the excise tax for beer and strong spirits (the revenues increased by – 3.8 million LVL).

Reduction of the non-taxable minimum for the personal income tax from LVL 90 to LVL 35 (the revenues increased by – 43.8 million LVL).

Increasing the gambling tax and fee.

B. Measures aimed at reducing the budget expenditures:

Reduction of the central bodies of the line ministries by 30%.

Reduction of the number of state agencies and reduction of their administrative expenditures by 50%, except for financing from the EU funds and other foreign financial aid.

Liquidation of councils of state-owned capital companies.

Suspension of training of civil servants and reduction of the functions assigned to the School of Public Administration.

Suspension of the activities of the Latvian State Commission on Calculation of Losses inflicted on the Latvian Nation by the Soviet occupation regime starting from 1 August 2009.

Substantial reduction in public administration:

1. Reduction of the expenditures on salaries/wages in public administration by 20% in the amount of 64 million LVL.

2. Additional reduction of the expenditures on goods and services in the amount of 9.2 million LVL.

3. Reduction of the expenditures in specific line ministries, including:

The Ministry of Health - 45 million LVL;

The Ministry of Defence - 15 million LVL;

The Ministry of Education and Science – 10 million LVL;

The Ministry of the Interior - 9 million LVL;

Total reduction of the expenditures on various programmes under the Ministry of Agriculture – 23.8 million LVL, including subsidies for farmers in the amount of 3 million LVL;

Investments of the Ministry of Regional Development and Local Governments into local governments and single measures of local governments – 5.5 million LVL;

The Ministry of Environment - 1.0 million LVL;

The Ministry of Finance - 46.1 million LVL;

The Ministry of Transport - 4.0 million LVL;

Reduction of financing for projects launched by the Ministry of Environment – 6.5 million LVL;
Administration of foreign financial aid projects by the Ministry of Regional Development and Local Governments – 1.4 million LVL;

Subsidies and grants for higher education establishments (all line ministries) – 7.8 million LVL, except for financing for scholarships and transport compensations;

Reduction of the base financing of science – 0.7 million LVL;

Subsidies and grants for cultural establishments – 1.7 million LVL;

Reduction of the expenditures on goods and services of permanent institutions – 0.3 million LVL.

Reduction of the Saeima expenditures – 2.8 million LVL;

Earmarked grants for local governments allocated for sports schools, art schools and music schools – 8.1 million LVL;

Education of five and six years old children – 5.7 million LVL;

Reduction of project financing for the Ministry of Environment – 3.0 million LVL.

C. Changes in the social sphere:

Reduction of retirement pensions and length-of-service pensions – 50.5 million LVL.

Reduction of retirement pensions for working pensioners by 70% – 37.8 million LVL.

Reduction of the national family allowance and parental benefit by 10% – 6.3 million LVL.

The line ministries shall be entitled to more precise elaboration of the items concerning their reduction amounts in the respective protocol decision of the Cabinet sitting.