Salaries and pension rise from 1 January 2016 – Education 4%, health sector 3%, military and police 2%, pensions 1.25%

Prime Minister Aleksandar Vučić announced on Wednesday (11 November 2015) an increase in salaries from 1 January 2016 for teachers in primary and secondary schools by 4%, for employees in the health sector by 3% and for university professors and military and police staff by 2%. There will also be a 1.25% linear increase in pensions, he said. A 3% salary increase is planned for employees in the social protection sector too.

The Prime Minister pointed out that higher salaries are not envisaged for employees of the public administration, Parliament, the Presidency and ministries. The budget is burdened far more by the increase in pensions than by salaries, said Vučić.

In his explanation the Prime Minister said that the space for increase was made possible by the successful implementation of reforms, and that for now this was as far as we can come, but hopefully citizens, especially those working in the education and health sectors, will feel at least some improvement. This improvement will be felt even more thanks to the decision to reduce the subscription for Radio Television Serbia to one third of the amount proposed.

According to his statement, all pensioners, regardless of whether their pensions were previously reduced or not, will receive a linear pension increase of 1.25%. He added that the total number of pensioners in Serbia is 1,736,154, of which 60% have never faced a pension cut, which means that with this increase they will have higher pensions than ever, also in real terms due to the zero inflation rate.

“Our decision will apply to all pensioners, both those with lower and those with higher incomes”, stressed Vučić at a press conference held at the Serbian Government on the occasion of the revision of a three-year arrangement with the IMF.

He pointed out that this means that a pensioner whose pension was 20,000 dinars, which previously was not reduced, will be receiving 20,250, one who had 40,000 will start receiving 40,500, and one who had 80,000 will now have 81,000 dinars.

The IMF, he said, demanded that the pension increase be lower.

“The army and the police, despite the IMF`s evaluation that the police is overpaid and the army is well-paid, will also receive an increase of two percentage points”, said Vučić.

Replying to the comment of the Minister of Finance Dušan Vujović that the increase is modest, Vučić stressed once again that he does not consider it to be little and that his goal is not to flatter anyone. As he said, negotiations with the IMF were difficult and there was even a possibility of their breaking off.

“The biggest problem was the percentage increase in salaries in the field of education, mostly for university professors because the IMF believes that they are overpaid”, explained the Prime Minister.

In his opinion everything that had been agreed with the IMF has in practice been surpassed by Serbia, as the IMF also concluded.

“The deficit is lower every month, we have even had a surplus. For the first time in recent history we are out of the red. This means that we have been working a lot harder”, said Vučić.

He said that the Government had tried to ease the "decidedly hard life" of the people. "We are on a very good, safe and stable path and that is why we created the fiscal space to increase salaries and pensions. I`m not talking about short-term benefits, I’m talking about a long-term solution”, said Vučić , adding that the RSD 7,000 one-off grant that was considered is not to be belittled and criticized.

As he said, anyone who does not want this money can always return it to the budget of the Republic of Serbia.

According to Vučić, healthcare workers would also like to receive these 7,000 dinars, but unfortunately, they cannot. As he pointed out, after 40 years, there is no budget revision this year.

“We worked harder than expected”, said the Serbian Premier.

He said that what is to be allocated is not a small sum.

Vučić estimated that the third revision with the IMF will be approved and that he even thinks that the Board of Directors will not meet over this, since Serbia has been working responsibly.

“Serbia is credible, Serbia is not to be played with”, he said.

He also announced that Serbia will fulfil all obligations related to rationalising the public administration.

“We have 11,000 people who have signed up for retirement, but only 9,000 are supposed to be cut. The problem is that we are not capable of finding which 9,000 should go”, he underlined.

He criticised the fact that everybody was engaged in some other task instead of this important one. This is why we were moving very slow with it and why the IMF has justifiably criticised us.

“Basically no one will be sacked, but we must figure out the best way to carry out rationalisation so that we do not have a situation in which an entire department disappears”, said Vučić and concluded: “We are late in implementing this due to my mistakes and those of the ministers”.

Translation provided by: www.halifax-translation.com