Parliament reviews 2015 budget amendments with political parties weighing in


A joint meeting of political parties in Parliament was held on Wednesday, where Members of Parliament held discussions on amendments to the 2015 budget and political parties introduced their requests and conclusions on the amendments.

DP: We support the initiative to deduct the salaries of politicians by 30 percent

Following discussions of amendments to the 2015 state budget, Chairman of the Democratic Party (DP) faction in Parliament B.Garamgaibaatar expressed the party’s position on salary reductions for higher ranking authorities, and introduced the party’s requests and conclusions on budget amendments.
B.Garamgaibaatar noted during his speech that the ruling DP completely supports the government’s initiative to reduce service prices, current expenses, salaries, and the planned purchasing of budgetary organizations, with the exception of budgets related to harvesting, winter preparations, preparation for natural disasters, keeping public order, national security, and healthcare.
The Chairman added, “In particular, we support the idea to reduce the salaries of politicians and the state’s higher ranking officials by 30 percent during a time of economic crisis… Mongolia is facing demands to amend the 2015 state budget as 2015 budget income is to be lower than expected, based on the main indicators of 2015 macro-economic assumptions, the conditions of the foreign and domestic economies, and the volume and prices of exported mineral products.
“It is time to live off of what we earn. In the past decade, Parliament has estimated budget income unrealistically, spent wastefully, and approved budget income and expenditure submitted by the Cabinet, augmenting it by seven to 15 percent, which has led us to the current negative consequences.
“We [the Democratic Party] now reminds Parliament to approve the state’s income in accordance with income and expenditure submitted by Cabinet. The Democratic Party supports the idea to estimate the budget’s expenses and income realistically, and to hold the deficit of the 2015 compound budget at five percent of GDP.
“Under the leadership of the Mongolian People’s Party, the budget deficit of 2011 reached 5.8 percent and 6.8 percent of GDP in 2012. Meanwhile, the DP is operating with a budget renovation policy to reduce budget deficit to five percent of GDP in 2015, 3.3 percent of GDP in 2016, and to make it zero percent of GDP in 2017. The World Bank, International Monetary Fund, and many other international banking and financial organizations approve of the renovation budget policy.
“In previous years, the government used to borrow from commercial banks devoted to entities in order to recover the budget deficit, leaving no credit space for private entities. The DP believes that it would be correct to end that situation by approving the budget with no deficit and giving opportunities to private entities to obtain credit of one to two billion MNT from the financial market.
“During the discussions of the 2014 state budget, the DP laid the beginning of budget reforms by requesting initiatives to inevitably renew the policy and situation that leads to the state’s wasteful spending and oversized current expenses of state organizations.”

Justice Coalition: Deductions from salaries will increase poverty

Chairman of the Justice Coalition (the merging of the Mongolian People’s Revolutionary Party and Mongolian National Democratic Party) D.Terbishdagva introduced the coalition’s conclusions on the 2015 budget amendments, stating that the coalition believes salary deductions will negatively affect people’s lives.
“Deducting salaries during a time when economic growth has slowed down, the foreign currency rate has been tightened, and the purchasing capacity of citizens has deteriorated will negatively affect the economy and financial system, as well as cause great financial pressure for state servants and their families, who are covered by mortgage loans,” stressed MP D.Terbishdagva. The MP added that this decision could become a strong factor in pushing people to poverty.
The coalition also reached the decision that the issue of mass deductions to the salaries of political and state officials that would be implemented under the draft budget amendment, calling to reduce current expenses by 43.9 billion MNT, needs to be reviewed.
The Justice Coalition believes it is correct to mobilize other sources of income, considering that the draft amendment to the 2015 state budget estimated that the budget’s deficit would reach over 900 billion MNT by the end of the year. Coalition members believe that generating around 400 billion MNT for the budget by collecting accrued arrears is not a realistic option.
“In order to create better conditions to attend parliamentary elections and make preparations for elections, lots of state servants and citizens visit and travel to foreign countries with state money. This case will be repeated. For instance, the 2015 draft budget amendment states includes spending for foreign appointments and visits by 12 percent, or nearly 3.8 trillion MNT.
“Current expenses – the spending for furnishing and items for state organizations – also has to be increased by 12 percent, or 2.9 trillion MNT, in accordance with the 2015 draft budget amendment, which proves that wasteful budget spending has been increased. Draft developers did not work properly to improve budget accountability and discipline,” noted D.Terbishdagva.
D.Terbishdagva also requested that some more unfruitful and insignificant investments included in the 2015 state budget be withdrawn, believing that more money can be saved from ending financing for insignificant projects. The state budget for 2015 includes spending of 381.6 billion MNT for 428 projects. With changes to the budget the number of projects was reduced to 422 with investment of 356.4 billion MNT.

MPP: Salaries should be increased by 80 percent instead of deducted by 30

At yesterday’s meeting of political parties in Parliament, member of the Mongolian People’s Party (MPP) D.Khayankhyarvaa delivered the party’s requests and conclusions on draft amendments to the 2015 state budget. MPP members have taken the position that policy holders should increase the salaries of state servants by 80 percent instead of deducting them by 30 percent, blaming the DP for not keeping their promise to the public.
D.Khayankhyarvaa went on to say, “The draft amendment of the 2015 state budget calls for reducing budget expenses by 530 billion MNT. Citizens have been tightening their belts since 2012, limiting their consumption, working to get over the economic crisis. Meanwhile, the luxury of cabinet ministers and state authorities has been excessive, causing wasteful spending. Since the implementation of glass accounts, the wasteful spending of state organizations and state owned entities has been revealed to the public and is frustrating them.
“Meanwhile, the government is considering saving 1.8 billion MNT by cutting the salaries of state servants by 30 percent, spending 12.7 billion MNT for green trash bags, 8 billion MNT on an unused railbus, and spending 1.2 billion for nonrefundable funds, all unveiled through the glass account policy. The nation is opposing that decision, that spending. We [the Mongolian People’s Party] are standing firm on our position that we are against the decision to reduce state servants’ salaries.
“The financial capacity of government has become extremely deteriorated. Since July 2014, Mongolia hasn’t been able to sell the desired amounts of bonds released in the domestic market. We hope that lawmakers are comprehending the risk that, from the end of this year, a situation might be faced where the government may not be able to grant salaries, pensions, and welfare on time, in the case that Mongol Bank does not buy the government’s bonds.
“In order to get votes from the public in the 2012 elections, the DP made a promise to increase salaries and pensions, adjusting them to the inflation rate and labor performance. In the last three years, commodity prices went up by 80 percent, and the tugrug’s purchasing capacity fell by 40 percent. For example, in 2012, a widely consumed loaf of bread cost 650 MNT, but now it costs 1,150 MNT. The situation has worsened, but the salaries of state servants has increased by only around 10 percent.
“MPP members asked to allocate 90 billion MNT in the 2015 state budget for the salary and pension increases, but policy holders left our request out of developing draft amendments to the 2015 state budget. Even more, they put all the blame on the economic crisis and submit an initiative to deduct the salaries of state servants by 30 percent. According to the [ruling DP’s] sworn promises, the time has come to increase salaries by 80 percent instead of deducting them by 30 percent.
“The MPP faction in Parliament is demanding not to decrease the salaries of state servants. During the 25-year history of Mongolia, since shifting to a free market, no initiative has been made to decrease salaries. Between 1996 and 2000, when [the DP] ruled the state, the salaries of state servants was held up for several months, failing to grant them on time. History is to be repeated. We advise that you learn from past mistakes and consider the initiatives submitted by MPP members.”

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