Budget austerity ordinance negotiations: Hiring and pay rises in state institutions frozen

Ban on pension/salary overlapping postponed. PSD wants the overtaxation of the accumulated pension and salary that exceeds the president's income.

The leaders of the ruling Coalition decided, on Monday afternoon, to stop hiring in the state and to reduce 10% of spending on goods and services, Digi24 sources say. The PSD, PNL and UDMR leaders met on Monday at the Government to discuss measures to save money on the budget.

At the same time, sources claim that the prime minister requested that until the new salary law, the salaries of budget workers should not be increased, but that there should be no cuts either.

Regarding the prohibition of the accumulation of the pension with the salary, the leaders of the Coalition decided that this cannot be done by emergency ordinance, being unconstitutional, according to some political sources. A decision would be made by law.

According to a previous working version of the Ordinance with measures to reduce expenses at the state level, obtained by Digi24, the cumulation of the pension with the state salary disappears, including for beneficiaries of service pensions and military pensions established by special laws.

Prime Minister Nicolae Ciucă announced in Thursday’s government meeting that the measures to reduce expenses could be approved this week. Prime Minister Nicolae Ciucă declared, on Thursday, before the government meeting, that the deficit in collection from the budget is due to “big taxpayers” who have not paid their “debts to the state”.

In his turn, the Minister of Finance, Adrian Câciu, stated that the ordinance regarding the reduction of expenses will lead to “the creation of an additional fiscal space” and he wanted to specify that “there is no hole in the budget”.


Overtaxation of the incomes of budget holders who have more than 25,000 lei from pension and salary

The leader of the PSD, Marcel Ciolacu, explained, on Tuesday, his proposal made in the coalition of additional, progressive taxation of the incomes of state employees who accumulate the pension with the salary and which exceed the income of the President of Romania, of approximately 25,000 gross lei per month. He claimed that the measure would only target budgets, not being discussed at this time for the private sector.

On Tuesday, Ciolacu explained the proposal made in the coalition, arguing that it is a “fair and professional approach”, being targeted by this overtaxation only the cumulative pension with salary, which exceeds the gross salary of the President of Romania.

“We are talking only about the cumulative salary and special pension and only about the budgetary area. At that moment, if through that sum you exceed the gross salary of the president, which is approximately 25,000 lei, it is normal to come, if it is constitutional, with additional taxation, because there are two revenues from the state budget. In the law, you cannot pass only those who also have a special pension component, you cannot prohibit only some. I believe that the correct approach is the threshold taxation area”, stated Ciolacu.
He said that the Ministry of Labor will do an analysis to determine how many budget workers would be in this situation, that is, they have cumulative income – pension and salary – over 25,000 gross lei.
austeritybudgetfrozenhiringMarcel Ciolacunegotiationsovertaxationpay risespensionpsdpublicruling coalitionspendingstate
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