The government targets a cash-flow general government deficit of Ft 895.1 billion for 2009 in its revised budget bill submitted to Parliament on Saturday.
The cash flow deficit is Ft 80.1 billion lower than the Ft 975.9 billion target in the original bill. The revised budget bill targets a general government primary surplus of Ft 310.6 billion in 2009, up more than 50% from Ft 199.3 billion in the original bill.
The revised primary surplus target is 1.1% of (a downward revised) nominal GDP, as against 0.7% in the original bill the government withdrew from Parliament last week. The total general government revenue target was cut by Ft 98.3 billion to Ft 16,990 billion and total spending was cut more, by Ft 179.2 billion compared to the target in the original bill, to Ft 17.885.1 billion.
The more moderate fall in targeted revenues could reflect the withdrawal of the planned 2009 tax cuts. In their absence, corporate tax revenue will be some Ft 40 billion more as the extra tax will stay in effect and revenue from personal income taxes will also be some Ft 40 billion higher than in the previous budget version as planned changes will not materialize.
The VAT revenue target was cut, on the other hand, by almost Ft 70 billion to Ft 2,270 billion. On the spending side, the new version plans Ft 60 billion or 11% less spending on family support than the original bill, and saved Ft 30 billion on spending on various subsidies and a similar amount on ministry-managed projects.
The 2009 cash-flow general government deficit target was cut to 3.1% of GDP from a downward revised 3.4% in 2008, and the same 3.4% rate targeted for next year in the previous budget version. (MTI–Econews)