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State budget for 2022 set to pass (Update 2)

plenum 960x720
The House plenum

The government’s proposed 2022 state budget is set to pass at Friday’s voting session as Diko and Dipa are set to support ruling Disy.

The three parties number enough MPs to secure 30 votes in favour, one above the 29 required to pass the budget.

The budget – heavily influenced by the EU recovery programme – was discussed in a long session in parliament on Wednesday, with all parties making statements.

It provides for increased revenue and slightly reduced expenses, while an increase of 10 per cent is slated for development expenditure.

Averof Neophytou, leader of ruling Disy, began his speech to parliament in stating that “the budget is our compass”, adding that government spending envisaged for 2022 is different from anything else that has come before it.

He further thanked the public for being responsible during the pandemic, saying that the state owes it to them that swift and positive developments take place.

“Following yet another economic trial, [similar to] the likes of 1974 and 2013, we are once more standing tall,” Neophytou said, adding that growth for next year is estimated at about six per cent.

Stefanos Stefanou, leader of main opposition Akel, began his speech to parliament in stating outright that his party will not support the budget.

Edek, Elam and the Greens said they require more time to deliberate, but initial projections appear to be that they will vote it down.

“A deep chasm divides us [Akel] and the Anastasiades-Disy government,” Stefanou said, while launching a scathing attack over recent setbacks – ranging from the “golden passports” fallout to the handling of a twitter account parodying then-Justice Minister Emily Yiolitis.

He accused the government of interference, corruption and conflicts of interest.

Dipa however argued that the budget could overhaul the Cypriot economy.

Dipa chairman Marios Garoyian praised the budget as a fantastic opportunity – and perhaps the final one – to change Cyprus, saying it includes substantial reforms which could lead to a “golden decade”.

The growth of the economy in 2022 is projected at 4 per cent, while the budget deficit is expected to record a significant decrease and reach 1.1 per cent of GDP.

Garoyian said the reforms have the potential to lead to a new world, one in which knowledge, information, technology and innovation are given a central role.

He also addressed those criticising the increased deficit, stating that: “While we called on the government not to be stingy, to support workers and companies, now there are those who criticising the rising public debt.”

Calling for major and bold changes, Garoyian expressed Dipa’s support for the introduction of a national minimum wage.

Edek leader Marinos Sizopoulos was more sceptical, noting the importance of infrastructure projects but emphasised the need to overhaul the Cypriot economy.

He said that the economy must be less exposed to external factors.

“The continued focus on… the construction industry, tourism and services places financial stability in danger,” Sizopoulos said. “These are highly fragile industries, impacted by external factors and therefore difficult to monitor.”

Revenue, excluding financial flows, is expected to reach €6.73 billion compared to revised revenue of €6.473bn in 2020, marking an increase of 4 per cent.

The most important categories of revenue are direct and indirect taxes are projected at €5.193bn and constitute approximately 82 per cent of total revenue.

The remaining 18 per cent of revenue is budgeted at €1.132bn and concerns non-tax revenue such as sales of goods and services, rental rights and transfers/sponsorships.

Expenditure, excluding loan repayments, is expected to show a slight decrease compared to the previous year. Specifically, for 2022 it is budgeted at €8.408 bn compared with €8.479 bn in 2021.

 

 

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