Prime Minister Edi Rama’s remarks at National Economic Council meeting:

Hello everyone and thank you for participating in this meeting of the National Economic Council, where we will discuss the next year’s draft budget.

Over the years, sometimes it was a presumed norm of choosing a budget name and I guess you all remember the budget for Decentralization, the budget for the Nation’s Highway, or the Welfare budget. Yet, such names have often failed to live up to the budget goals back then. What is most obvious – if we are to look back to grasp and know where we stand today – the reason was drafting state budgets that projected a deficit, sometimes frightening ones, which were later funded by an ever-higher national debt.

I am delighted to state that this is no longer the case and now it is already a consolidated tradition of our government that the deficit and the debt are under control and step by step have more and more solidity in relation to the budget’s totality, unlike any other proposed state budget in the past when debt was funded by debts that piled up consistently.

The 2019 state budget is the sixth budget to be adopted on the Socialist government’s proposal. I recall that when drafting first state budget we had to deal with a substantial debt stock, or rather a large stock of unpaid bills and arrears accumulated by the previous government and, on the other hand, with the threat of a collapse of our country’s energy system.

Step by step, the state budgets gradually started to be freed from these two heavy burdens, whereas higher priority and more attention was attached to the public investments, economic growth and promotion of employment.

It is always said that this year’s budget will be the largest ever and normally every next budget is larger than the previous one, because the country sees a bigger growth over the years, but consistently the next state budgets have normally been larger than a previous one.

If you are to consider the budget’s inner structure, you will find out that this year’s budget is not simply the largest one, but it is a budget with a significant revenue growth compared with the current year and within the budget framework is the most significant compared to previous years’ budgets, almost $ 300 million in a single year.

This year’s budget, after being given the permission by the Finance Minister, I can say a mouthful this is the first state budget ever we draft with a satisfactory coefficient of freedom from the strong and later less strong, yet pretty influencing constraints we faced at the very beginning.

The projected state budget revenue will support a number or a substantial share of important social policies.

Preparations are underway to hold a special meeting on the share of social aspect of our proposed budget, but taking into consideration the entire accumulated volume and a consolidated hard-won right over the years, then gained for all categories, or in all aspects we intended to increase social care and is really, for us, a reason to be proud, but also surprised at the considerable share of the budget’s social component.

A sharp hike in the baby bonus, or baby cash gift, will enter into force this year. The baby bonus has transformed from a symbolic-based policy into a policy based on meaningful solidarity. Around 30 000 families will benefit under an around $20 million baby bonus programme.

This is our projection on the number of families to benefit from this programme and we should bear in mind that we are talking about an 8, 16 and 24-fold increase of the current 50 000-lek cash bonus. The cash bonuses will increase 8-fold to 40,000 for the first child, to 16-fold or double to 80,000 lek for the second child and to 24-fold or treble to 120,000 lek for the third child.

I want to again explain something since I have been repeatedly asked how the baby bonus will be provided should a woman is to give birth to twins, or triplets? In every case, the twins will be both considered as a second child and not as the first. The triplets will benefit the baby cash gift as third child, sot 3 multiplied 120 000 lek.

Likewise, we now can afford to announce a new wage hike for employees in the public education and health sector as well as in the military starting as of April 1. This date coincides with the fools’ day, but for us it happens to be a day when we have seen a number of positive developments for the country.

The employees in the health sector will enjoy the highest salary hike. We believe this is indispensable and the health system employees will receive a 10 percent pay raise.

The public education salaries are set to register a considerable hike of 7%.

Around 4650 doctors and 13765 nurses around the country, including lab workers and hospital pharmacists, as well as 350 000 teachers will benefit the wage hike.

Likewise, the wage hike for 6800 servicemen will range from 5% to 7%.

The new state budget will also support a number of new policies ranging from social enterprises, an alternative integration programme for the least advantaged social groups and aimed at increasing employment rate for the needy people, to the establishment of 27 new social care services and centres for the most vulnerable and affected social categories and the households on government welfare benefits by providing them social and health packages. The programme will include around 69 000 families.

An initial step has been already made towards funding the National Diaspora Agency. We are currently at a stage when we are trying and waiting for our friends in opposition to turn their light of reason on in order to press ahead with the Electoral Code as we are seeking to sanction the vote of emigrants. At the meantime, we are also working on an entire working structure for the emigrants.

But what I believe is the most important in terms of the budget volume are the infrastructure investment in an estimated funding of half of a billion to support important national road projects, water supply projects, the waste treatment and further rehabilitation of the country’s power network.

I won’t go into details about the road segments, but I would point out the programme on reconstruction of the whole network of healthcare centres across the country.

Works on construction of 100 healthcare centres, following the first 80 centres already built, are underway and are set to complete by the year end. As many as 100 other healthcare centres will be reconstructed or constructed from scratch next year, whereas projects on construction of other hospitals will also complete in 2019.

A number of new and indispensable medicines will be included on the reimbursement drug lists. We plan to support capacity building and increase number of health checks in primary care, increase the number of patients benefiting hospital treatment, reduce infant mortality rate and cut waiting time for patients, especially regarding important examinations such as resonance screening and scanning, etc.

The budget will further support the free-textbook policy for the primary school schoolchildren. Special focus has been placed on the transportation of school children if the distance to the school is more than two kilometres and the transportation of teachers if the distance to the school is more than five kilometres. The funding for laboratories has also increased and meanwhile we are working towards achieving the goal of creating 100 smart or digital classrooms each year.

On the other hand, it is a positive fact that we are consolidating the position in relation to the farmers and agriculture support under the national support schemes to help farmers across the country. We believe in a huge direct impact, with an approach increasingly oriented to productivity and value chain, and we also increase support for local government.

Justice Reform is a commitment not just to amend the Constitution and the legislation, but also to financially support the whole process, quite expensive considering the opportunities, but absolutely indisputable and inalienable.

The new fiscal package, based also on your dogged persistence, includes first:

– A rise in the monthly taxable income limit, currently at a limit of 1.2 to 1.5 million lek. It is a considerable cut and as many as 16 000 individuals both in public and private sector, especially in the private sector, will benefit. These are the highest-paid individuals who earn high income thanks to their qualifications and capabilities and this group of people represent somehow the executive elite of the whole administrative system of both private and public sectors.

– We can now afford to meet another persistent yet legitimate demand from the entrepreneurship and it is hopefully now the time for the coffers for the proceedings of the undistributed dividends to open and inject them in the mainstream economy and consumption, as the dividend tax rate will be reduced to 8%. This is a measure I believe will bring considerable economic and social benefits, beyond propaganda and beyond the senseless ideologies on the dividend.

– The VAT exemption base on imports of the import of new agricultural machinery and equipment. The tax on electric buses importers has also been cut.

– All subcontractors operating in the garment and footwear industry, and importers of the importers of pharmaceutical raw materials will be also excluded from paying VAT.

– The most important aspect in our point of view is the increase of the small business annual turnover from 80 to 140 million lek while the profit tax rate will be only five percent.

Whoever claims that we our government has levied high tax rates should provide even a single and significant evidence: they should name another country in Europe that has imposed a five percent tax rate on small business which accounts for 93 percent of the Albanian economy.

In other words, 93% of business in Albania pays a tax rate of 5% only;

The other 7%, which is represented by you, should pay a 15% tax rate and you should be satisfied because you earn more and therefore you should pay more. We have stated this and we stick to it. Whatever Nikolin says, who has the legitimate right to do so, the 15% rate won’t be cut.

With the gambling and sports betting to be banned, the milk producers and every other producer attending this meeting should consider the fact and calculate an average of around 700 million euros that will go to rational consumption of households.

Therefore, the household consumption capacity will further increase and you will see for yourselves the benefits you will reap in this aspect. However, it is the women, mothers and parents who will benefit most from this decision. The move is also a direct contribution to healing the sick from the obsession of foreseeing the destiny.

To conclude, to all who keep singing “the debt song” – and I mean not you, because you want the debt to grow further –  I want to let them know that we expect the debt to fall to 65.3% in 2019. It means a significant decrease by 2.5% of GDP. From an out of control debt that seriously threatened the country 5 years ago, today we have a situation that has brought the capital markets to success. Just as I’m convinced that sooner or later we can get another “B” in our international ratting.

Thank you very much for your attention!