Parliament passed the budget this afternoon after a raucous session.
In the morning they accepted theBudget Commission's recommendation to reprogram 50 million lei ($4 million) of spending. They did not fund the census (10 mil), reduced the reserve fund by 10 mil, reduced forestry spending by 5 mil and found a variety of other reductions. They spent the 50 mil by adding 18 mil to the social fund, 10 mil to rehabilitation centers, 5 mil for TV/Radio, 3.2 mil for the Medical University, 5 million for additional capital projects and an assortment of others.
Then came the interesting part. The original budget had apparently increased the VAT on agricultural goods from 5% to 20% and spent the proceeds (90 mil lei) on agricultural projects. Earlier on they had agreed to reject the proposed VAT increase. The problem was that as a result there was only 30 mil lei available for agricultural projects. The communists and many others very much wanted to restore the 60 mil lei to the agricultural projects without making any other changes. The Minister of Finance said that the IMF would not give Moldova any funding if they did that. They recessed for lunch with the issue unresolved. After lunch the debate raged.
The Minister of Finance added that he would resign if this amendment was adopted. So they voted on the budget without the amendment. They counted the votes twice and then counted the duputies in the hall. Though they had trouble agreeing on the exact count it was clear the budget had failed to pass by a handful of votes. So they took a break. When they came back it was clear a deal had been made: revenues and expenditures were both reduced by 60 million lei and the government was directed to find a way to restore the missing 60 million lei for agriculture. They rescinded the earlier vote and passed the budget 85 to 7. Then they congratulated each other and the government for their hard and productive work.
Then they resumed an earlier discussion about the process of electing the president, whether observers would be invited, whether TV cameras would broadcast the sessions live etc. Then they asked their guests to leave, so I don't know how the story ended.
Earlier this morning they debated amendments to the 2000 budget. The revised revenue estimate is up 101.4 m lei, spending is down 7.6 m lei and the deficit is down to 271 m lei (was 380 m). That sounded pretty good until I noticed that the increased revenue consisted of a decrease in tax receipts of 116m lei offset by an increase of 219 m lei in National Bank profits being transferred to the budget.
My biggest question at the end of the day is why nobody even suggested using part of the extra 100 million in extra revenue for the year 2000 to transfer to the agriculture fund for the 2001 projects.
It was fun.