2008 State Social Insurance Budget adopted at first reading

Parliament today adopted, upon first reading, the State Social Insurance Budget for 2008, which plans incomes of 6.25 billion lei and expenses of 6.27 billion lei. The Budget is by nearly 1.3 billion larger than this year’s. Payments of state social insurance will be the main source of incomes and are estimated to climb 27.6 percent to 5.27 billion lei. The contribution of the state budget will represent 950 million lei, while non-fiscal incomes are forecast to top 23 million lei. The quantum of the state social insurance was maintained at the level of 29 percent of the monthly salary, yet the contributions are planned to be split differently between the employer and employee. The proposed formula is 24+5% employer/employee, as compared to 25+4% employer/employee used at present. For the persons working in the farm sector, the quantum was maintained at 20 percent, of which 16 are payable by the employer and 4 by the government. The quantum of the social insurance for self-employed persons rose from 2,318 lei in 2007 to 2,920 lei in 2008, while for owners of farmland – from 576 to 725 lei. The largest expenses are envisaged for the pension fund – 4.5 billion lei, which is by 840 million lei more than this year. The fund for protection of families with children will be by 11.5 million lei richer and will constitute 93.1 million. In this connection, the allowance for the first-born child rose from 1,000 to 1,200 lei and the regular childbirth allowance was raised to 1,500 lei. The Sick Benefit and Labour Accident Insurance Fund will amount to 2.7 million lei. The Opposition criticised the Budget Draft arguing that it will not lead to any improvement of the pensioners’ living conditions and will not encourage an increase in the birth rate. The Opposition MPs believe that the planned increases lag behind inflation and price hikes. In this connection, unaffiliated MP Ivan Banari suggested raising the childbirth allowance to three thousand and increasing the monthly child benefit. In the opinion of Democrat Valentina Buliga, the social insurance policy proposed by the government imperils the financial stability of the system, in particular, and its future existence, in general. “UN has set a 3 dollars-a-day threshold delimiting the persons living a normal life and the population living in poverty. Where can we place the pensioners living on 18 lei (1.5 dollars) per day?”, she wondered. The leader of the Moldova Noastra Alliance Party, Serafim Urecheanu, suggested that the State Budget should earmark an extra 200 million lei in order to double retirement and social pensions, as well as to raise the allowance for the first-born child to 3,000 lei and the regular childbirth allowances to 5,000 lei. Otherwise, the Communist majority should get ready for tough reactions from the Opposition and the populace, he stated. At the same time, Communist MP Vladimir Eremciuc, mentioned the significant increases in the expenses envisaged by the Social Insurance Budget and the steps taken by the government to improve the living conditions of the population. In addition, he emphasised the wage hikes offered in the recent years, and the fact that, unlike before 2001, pensions are paid on time. The draft was passed in first reading with the vote of the Communist majority, which voted down the proposal to increase the governmental allocations by 200 million lei.