Slovenian Parliament adopts measures to mitigate the impact of coronavirus on the economy

Slovenian Parliament adopts measures to mitigate the impact of coronavirus on the economy

Slovenian Parliament passed on Thursday a package of laws aimed at mitigating the impact of the crisis caused by COVID-19. Measures include pay compensation for temporary lay-offs, credit payment and tax duty deferrals for companies, as well as trade restrictions for agriculture and food products. One act also gives the government direct control over the budget.

A major part of the package is the act providing state aid in pay compensation for temporary lay-offs of employees at the companies that will need to temporarily lay off at least 30% of their workforce due to disruptions in supply or a drop in demand.

The act, whose costs are estimated at EUR 50 million, stipulates that temporarily laid-off workers will be entitled to 80% of their wage average from the past three months, with the employers having to cover 60% of this sum and the state 40%. The maximum temporary lay-off period will be three months.

Aid will also be provided in the cases where employees are unable to work as a result of self-quarantine, with the state covering 80% of their salary.

In line with amendments adopted at the committee level, the scheme was extended to those who are self-employed, however, the only aid will be the possibility to defer social contribution payments for the coming three months by up to two years.

Government representatives stressed the measures were about preserving jobs and avoiding that people becoming a burden of the Employment Service, with the left-orientated opposition parties arguing that too little is being done for the self-employed, who are actually the most vulnerable group.

“100,000 sole proprietors is a number we should not ignore”, said Soniboj Knežak of the SocDems, but an amendment by the Left to write off these social contribution payments was rejected.

The pressure on business will meanwhile also be mitigated with an act that reduces the administrative and tax burdens on companies, pushing back the deadlines for tax documentation filings and allowing companies to ask for a tax deferral of up to two years or for paying tax in up to 24 installments.

The same bill notably gives the government full discretion in the use of budget funds approved for purposes not deemed part of legally binding tasks.

The government will be able to reallocate funds without a supplementary budget, or more precisely on the basis of a supplementary budget that need not be submitted to parliament until up to 90 days after the crisis ends.

“There will not be a situation in this country where funding would not be available for equipment to save lives”, Finance Minister Andrej Šircelj said in defence to the measure, as a number of MPs expressed reservations, including among the ranks of the coalition.

“The government is awarded powers that are unmatched in Slovenia’s independence era and by far exceed those the government had during the financial crisis”, noted Robert Polnar of the coalition Pensioners’ Party (DeSUS).

The opposition MP Luka Mesec expressed “fear these measure will be used for an illegitimate consolidation of power” and argued it could be unconstitutional.

Šircelj responded by saying the government would table regular reports to parliament about the reallocation of funds, a provision inserted in the bill in an amendment.

Another emergency act adopted will allow banks to defer liabilities of companies, co-operatives, self-employed and farmers by 12 months. Banks will be compelled to do so for those whose business has been thwarted under government measures to contain the coronavirus outbreak. The act will also apply for loans taken during the epidemic.

Emergency measures were also taken that restrict trade of agricultural and food products, livestock and poultry, in order to ensure sufficient food supply for the country./ibna