Incoming Finance Minister Ivan Miklos, in an interview with the Sme daily paper, said that the tough reforms the new centre-right government has promised could cause social unrest, but that they could no longer be put off.
He explained that one of the keys to successful reform of the education, health care, pension and social benefits systems would be support from the civil service, which the government would secure by amending a civil service law to allow state managers to give higher pay to more proficient workers, as well as to dismiss incompetent employees more easily.
Mikloš added that planned increases to regulated utility prices, combined with increases in consumption taxes, would reduce real wage rises and cool domestic demand, helping the nation deal with some of its worst macro-economic problems, such as its trade deficit.
While the new government’s overall goal was to reduce the total burden of taxes and social fund payments, Mikloš said that taxes might initially rise before the government launched spending cuts.
While income tax rates would likely fall in the next four years, he said, the cabinet would focus on reducing social funds dues charged to employers, which are now over 38 per cent of gross employee salaries.
The money businesses saved, he added, would help create new jobs and reduce Slovakia’s 18 per cent jobless rate.
Compiled by Tom Nicholson from press reports.
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