TEPAV: "Revised Budget Target Might Not Be Fulfilled Due To SSI"

ANKARA – TEPAV stated that budget is faced with a pressure for expenditures above the level of SSI allowances and said: “Under these circumstances, it appears that the most significant risk that will lead to a budget deficit even below the revised level is the transfers to SSI. It should be noted that, for the elimination of this risk, some of the liabilities of 2009 over passing the allowance level can be transferred to 2010 through the use of some accounts employed in budget accounting.”

Fiscal Monitoring Report 2009 October-November Budget Implementation Results prepared by TEPAV Stability Institute is announced. The report underlined that total transfers to Social Security Institution (SSI) rose by 57.6%, pushing up the realization rate compared to initial budget to 107%. The report maintained: “Fiscal monitoring reports published in 2009 as well as the budget evaluation report for 2010 emphasized that the changes in the SSI balance must be monitored closely.” and added:

“Apart from the structural problems, SSI balance deteriorates due to seasonal factors resulting from the global crisis. In this context, this fiscal problem resulted from the failure to calculate precisely the financial impacts of the new SSI regulations (in fact, there is no declaration regarding the calculations, which is in violation of No 5018 Law Article 14); the inability to put forth concrete efforts to find solutions for structural problems considering health expenditures; and the fall in premium collections along with the seasonal impact of the crisis. However, it is argued that the main source of this situation is structural problems, in health sector and particularly in the field of medicine, rather than the conditions posed by the crisis. In fact, premium revenue collection increased by 8.4% despite the fall in the number of people registered in the system. On the other hand, the rise in health expenditures is recorded as 14%.”

Attention must be paid to non-standard practices

Emphasizing that the budget is faced with a pressure for making expenditures above SSI allowances, the Report argued that the most significant risk that will lead to a budget deficit even below the revised level is the transfers to SSI. The report continued:

“For the elimination of this risk, some of the liabilities of 2009 passing beyond the allowance level can be transferred to 2010 through the use of some accounts employed in budget accounting (such as No 323 Budgeted Liabilities Account). This type of semi-fiscal operations and non-standard practices in the reporting of expenditures which might possibly be launched to create non-budgetary liabilities require close monitoring of allowance records and calculations for this year as well as consecutive years.”