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TEPAV: “Method Of Liquidation Of The Obligations Of Public Institutions Is Not Compatible With Fiscal Transparency” TEPAV criticizes that the bill of law negotiated by the TGNA allows the institutions the obligations of which are liquidated to account the fiscal transactions in form of transfers out of the budget.
13/07/2010 - Viewed 1888 times ANKARA - TEPAV criticized the "Bill of Law on the Regulation of Certain Obligations and Receivables of Some Public Institutions and Agencies" which is currently discussed at the Grand National Assembly of Turkey (TGNA) and said: "The bill of law allows the institutions the obligations of which are liquidated to account some fiscal transactions in form of transfers without relating with or involving in the budget, which is in conflict with fiscal transparency."

Fiscal Monitoring Report - 2010 March-April-May Budget Results prepared by TEPAV Stability Institute is announced.

The report underlined that the bill of law that liquidates the obligations and receivables of some public institutions and agencies across each other is on the TGNA's agenda for the last couple of months. Maintaining that the bill stipulates the correction of 15-17 billion TL out of total 20 billion TL of receivables across public institutions as net liabilities, the report continued:

"With this law the obligations and receivables of energy SEE's, municipalities and other public institutions and agencies to and from each other are entered in accounts. More importantly, the institutions the obligations of which are written of are allowed to account the fiscal transactions in form of transfers without relating to or involving in the budget, which is in conflict with fiscal transparency. This attempt is more striking as made on the eve of the enactment of Fiscal Rule Law."

Budget performance improved

TEPAV Report indicated that according to the budget implementation results as declared by the Ministry of Finance, central government budget deficit decreased by 51.7% in May compared to May 2009 and stood at 10 billion TL. As of the end of May, budget expenditures rose by 5.3% compared to the same month in the year before, reaching 112.6 billion TL. Primary expenditures increased by 9.4%. In the same period, budget revenues improved by 19% to 102,6 billion TL. Tax revenues rose by 25%.  

The report, commenting on possible future outlook of the budget, said:

"Over the rest of the year budget expenditures are expected to elevate. This will stem from the realization of deferred and/or not accrued capital expenditures, service procurement and capital transfers as well as from the expenditure-raising regulations involved in the proposals submitted by the government to the TGNA since May. In this period, the performance of the budget deficit will mostly be determined by the pace of increase in budget revenues."

Flexibility of expenditure decreases ...

The report stated that the share of inflexible expenditures in 2010 as of the end of May stood 0.4 points above that in the year before reaching 82,6%.  Highlighting that expenditure flexibility was lower in 2010 despite the fact that the mentioned flexibility in 2009 was quite low as the impact of the crisis was felt more severely, the report maintained:

It should be noted that the elevation of expenditures result mainly from inflexible items involving personnel expenditures, state contribution in social security (SSI) premiums and transfers to SSI. This implies that in the coming months the pressure put by the expenditures will intensify."

 

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