Pay cuts painful, but gov't has no better solution

BELGRADE - Cuts to salaries are a painful measure in political, economic and human terms, but at the moment the government does not have a subtler mechanism, Finance Minister Dusan Vujovic said at a meeting of the parliament's finance committee on Saturday.

During a debate on the 70 amendments put forward to the draft budget review for 2014, Vujovic said that he accepts the logic that the public sector employees doing a good job should have higher salaries, but there is no place in the budget review for such reorganization efforts.

The minister noted that efforts are being invested to develop a system of appraisal and reward, and said that the laws governing this should be discussed in the parliament soon.

"That will be a chance to adjust these austerity measures so that their consequences are minimal. Everyone will then have the right to do a merit-based distribution, within this narrow budget space, and increase salaries to some and reduce to others," Vujovic said.

Twelve amendments have been submitted to the bill modifying the budget law, including the accompanying laws, and the one governing the announced reduction in pensions and public sector salaries that exceed the net sum of RSD 25,000, to which a total of 70 amendments have been tabled.

For an example, MP of the opposition New Party Vladimir Pavicevic proposed an amendment that will reduce subsidies to the economy from RSD 17 billion to RSD 12 billion, and channel RSD 5 billion into the Pension and Disability Insurance (PIO) Fund.

Then, the government would not encroach upon pensioners' acquired rights by introducing cuts to pensions as of November, as the announced changes to the law envisage, he said.

Photo Tanjug, R. Prelic