The new Government’s decision to increase salaries for several categories of public employees in Romania will have a budget impact of RON 5.1 billion (EUR 1.1 billion) this year, according to the draft law published by the Finance Ministry on Friday.

The bill doesn’t mention the budget impact for the next years, reports local News.ro.

The law provides an increase of 20% in the wages of people working in local administration and 50% higher salaries for actors and artists working in state culture institutions.

The government also wants to increase the pension point to RON 1,000 (EUR 221.8), increase the minimum pension from RON 400 (EUR 88.7) to RON 520 (EUR 115.3), introduce free railway transport for students and double the state scholarships for students. The question arising is how the government will pay for all this.

Prime minister Sorin Grindeanu said that the government will remove the measure that capped the contribution to the public healthcare system to five gross average salaries, which means that people with very high wages in Romania will pay higher taxes. This will bring revenues of RON 2 billion (EUR 444 million) to the state budget.

editor@romania-insider.com