Prishtina, 29 October, 2024
Prime Minister Kurti’s complete speech:
Dear Media,
Dear citizens,
For these four years of governance, we have managed to make radical transformations that are in the best interest of the citizen. One of these transformations is the state budget.
Throughout our governance, we have managed to increase budget revenues like never before. As we are preparing the budget for 2025, projected budget revenues are 3.3 billion euros. This is 90% higher than the level in 2020, before our government, or if we compare it with the pre-pandemic year 2019, it is 74% higher.
Higher revenues have enabled us to have a higher budget, without burdening the state coffers with a budget deficit or public debt. For the year 2025, the budget planned for expenditure marks the level of over 3.6 billion euros, which compared to 2020 is 60% higher.
We did not achieve this increase by increasing tax rates and charging citizens with more taxes. We even reduced the tax by exempting the minimum wage from personal income tax, where as a result each employee, whether in the public or private sector, has a little more money in his pocket at the end of the month.
We have achieved the increase in budget revenues by fighting smuggling and by tightening the control of our borders. We have achieved the increase in income by extending the tax burden to those who in the past were considered stronger than the state, and the state did not dare to go to their door to ask for their tax.
But mostly, we have achieved the increase in income by supporting the sustainable growth of our country’s economy. On the one hand, supporting producer businesses to create new jobs, while on the other hand increasing support for families to increase economic activity and further strengthen the economic cycle of adding new jobs , because more demand and more activity results in the need for more jobs.
For these four years of government, the Gross Domestic Product has increased so much that for the first time this year it will exceed the figure of 10 billion euros, while for the next year it is expected to go beyond 11 billion euros. So, the trend is continuing, where with our government, 1 billion euros are added to the economy of Kosovo per year. In 2020, the Gross Domestic Product was only 6.7 billion, and in the pre-pandemic year 2019, it was only 7 billion euros. This year we are passing 10 billion, and next year we will pass 11 billion.
This economic growth has also been comprehensive, because for the first time we have a consistent increase in jobs alongside economic growth. So, for each year of government, we have a positive increase of new jobs and so far there are over 75 thousand new jobs registered according to official figures.
So, we have tried to return the money collected in the budget to the citizen, either in more efficient public services, or as additional support for families. And this then turned into more growth of the economy, and consequently more budget.
That is why we are committed to continue this formula of success, where the budget is put at the service of the citizen, and not of a small interest group, as usually happened in the past.
Two months ago, for the 3rd anniversary of the launch of the child allowance program, we also presented the redesigned scheme, which doubles and, in cases with three or more children, even triples the income for the family from the allowances. This brings the total annual support for the family to 120 million euros, or 60 million euros more than it was three months ago.
At the beginning of this month, we also presented the increase of pensions for all categories by at least 20%, which translates into a monetary value of 100 million euros more per year for our pensioners.
And now, as we are finalizing the budget law for next year, we have good news for all public sector employees.
With the entry into force of the wage law in the public sector, in 2023 we had the most substantial increase in the last decade, increasing the wage budget by 114 million euros. Even in 2024, we applied the increase of the coefficient, raising it from 105 to 110 euros. While now in 2025, it will be the third year that we increase salaries in a row.
So, while in the past salaries were increased only once within the mandate, and only in the campaign, with our good and democratic governance, they are increasing every year since the entry into force of the salary law, just as the law foresees.
One thing should be emphasized, that we have done and continue to do the increase for each year in accordance with what is provided by the law on public finances. So wage growth must be in line with economic growth, because otherwise the state’s finances could enter the path of instability in the long term, and this would be irresponsible.
But thankfully, during these years in government, we have proven that we know how to treat public money with hospitality, and we have also grown the economy. Together, these two have enabled us to make a substantial increase in salaries in the public sector for the next year, always maintaining the long-term stability of the budget, as well as being in accordance with the legal framework in force.
Now, to the topic that everyone is waiting for, what will be the coefficient.
Given the need to support those with the lowest wages the most, especially in these times when the whole globe is facing increased costs of living, we have gone to the maximum allowable budget increase for wages, and at the same time we have decided not to increase the value of the coefficient, but to increase the coefficient for one unit, for each public sector employee.
So, the value of a coefficient remains 110 euros, but the amount of coefficients per unit increases, starting from January of the next year for 0.5 units, i.e. for half a unit, and then from July of the next year for another 0.5 units. . In other words, someone who has a coefficient of 5.6, in January it becomes 6.1, while in July the coefficient becomes 6.6. Similarly, for someone who has a coefficient of 10.5, from January it becomes 11.0, and from July it becomes 11.5.
Expressed in monetary value, it falls to all employees in the public sector, their salaries will increase by 55 euros starting from January, and by 110 euros from July next year 2025.
In this way, we distribute the budget increase over-proportionally to those with the lowest salaries, thus further reducing the gap between the highest and the lowest salary.
So, for the teacher, policeman, soldier, nurse, firefighter, the percentage increase will be around 18-20%, while for the higher positions the percentage increase will be 6-7%.
The full annual cost of this increase will be around 120 million euros, which together with the increase we have made for pensions and child allowances, brings the total to 280 million euros more money in citizens’ pockets from these 3 measures alone .
As a government for everyone, we will continue to work even further, to use the state budget for the benefit of all citizens.
Thank you!
The complete speech of the Minister of Finance, Labor and Transfers, Hekuran Murati:
It is a pleasure to be here with you today and in front of you, dear media, in front of all the citizens as well as in front of the public sector employees, for whom the prime minister just gave the good news, since January the salary increase is expected, but not as it is usually so that the value of the coefficient increases and everyone benefits proportionally. This time, we decided that the budget was maximized for salary increases, that is, we went to the maximum allowed according to the law, and thanks to the economic growth, we also had enough space, and that budget that we had instead of distributing it proportionally, that is, to all with the same percentage, we have decided to distribute it in absolute value, where then if it is translated into a percentage it falls for some positions that have lower salaries, the increase in percentage will be very high, while for high management positions the increase can be 5, 6 or 7% depending on the level of the coefficient.
In this way, we are maintaining fiscal sustainability, but we are also making sure that those who are the biggest contributors to the continuous functioning of the public administration, of public services such as teachers, firefighters, policemen, soldiers, public administration, i.e. the professionals who work here, benefit mostly from this increase. However, even in the discussions we have had with our international partners, precisely with the International Monetary Fund, it has been a continuous negotiation to convince them, and thanks to the fiscal discipline and prudence in terms of fiscal policies that we have shown in the four years of In the end, it was easier to convince them to go with this version.
The increase therefore takes place in two phases (two steps), in order to enable inclusion even within the budget limit. So initially, the increase will be made with half a unit of the coefficient from January, from January’s wages, or translated into a monetary value of 55 euros gross for all employees. However, from July, the second part of the increase, the other half of the coefficient, comes into force, to result in a full coefficient, i.e. 110 additional euros for each employee in the public sector, salary increase.
Below we can see some examples of some of the key positions. So you can see what the coefficient is now and how much the basic salary results without work experience allowances and other allowances that can be foreseen, and what the salary will look like with the new coefficient as well as the percentage increase.
As you can see, there is an increase of 17.85% for teachers and soldiers and up to 20% for policemen, firefighters, nurses. We must bear in mind that there are also positions with a coefficient of 4, namely technical workers, for whom the percentage increase will fall above 25%. They will tell me, we wanted and made sure that the money we had available, which resulted from the good management of the budget for these four years and the stable economic growth, to distribute as much as possible to those who have salaries lower in order to further reduce the gap between the highest and the lowest salary in the public sector. So, from January 1, 2025, 0.5 units of the coefficient will be added for all employees, while from July 2025, another 0.5 unit of the coefficient will be added – in total, a coefficient for each employee in the public sector.
So, this is what we have managed to do and I believe that it is very good news for all employees in the public sector, because we have heard recently that there have been unstable and inaccurate promises that do not even coincide with the budget reality and nor with legality and the legal framework. But in this way, we are achieving that by changing the calculation formula and the increase formula, the increase is more distributed to those who have lower salaries, as a percentage, i.e. over 20% to 25 or 30% for some specific cases.
Thank you for being here today.
Last modified: October 30, 2024