At the request of the Government, the Chairman of the National Assembly of the Republic of Serbia, Predrag Markovic, convened the Seventh Extraordinary Sitting of the National Assembly of the Republic of Serbia in 2006 for 12 pm on Monday 25 September 2006.

The Government set the following agenda in the request for holding the sitting:

1. Bill Amending and Modifying the Budget System Act,

2. Bill Amending and Modifying the Act on the Budget of the
Republic of Serbia for 2006, along with its associated Proposals of
Decisions Granting Consent to
a) Decision Amending and Modifying the 2006 Financial Plan of the
Republic Fund for Pension and Disability Insurance of
Employees,
b) Decision Amending and Modifying the 2006 Financial Plan of the
Republic Fund for Pension and Disability Insurance of Farmers,
c) Decision Amending and Modifying the 2006 Financial Plan of the
Republic Fund for Pension and Disability Insurance of Private
Entrepreneurs,
d) Decision Amending and Modifying the 2006 Financial Plan of the
Republic Health Insurance Agency, and
e) Decision Amending and Modifying the 2006 Financial Plan of the
National Employment Service.

On the first day of the sitting, at the start of the debate in principle on the Bill Amending and Modifying the Budget System Act, the deputies were addressed by the Minister of Finance, Mladjan Dinkic.

Presenting proposed changes to the Act, Dinkic underlined that budget planning several years in advance was being adopted due to the operation of the National Investment Plan, to be realised from 2006 to 2011. The amendments aim at preventing earmarked assets from being switched to other uses. Dinkic announced the introduction of internal revision into the public finance system, relating to both direct and indirect users. One of the novelties proposed is making it a criminal offence, for the first time, to misspend budget assets.

Key changes to the budget system will ensure the introduction of stricter controls over how budget assets are spent, Dinkic concluded.

The end of the morning part of the sitting marked the conclusion of the discussion in principle on the first item from the agenda, and the commencement of the joint discussion in principle on the Bill Amending and Modifying the Act on the Budget of the Republic of Serbia for 2006 and its associated proposals of decisions granting consent.

In the afternoon part of the sitting, the deputies were again addressed by the Minister of Finance, Mladjan Dinkic, who spoke on behalf of the proposer about rebalancing this year’s budget. Presenting proposed changes to the Act on the Budget for this year, Dinkic underlined that Serbia had, for the first time, a budget surplus of over two billion Euros, as well as that the Government had therefore decided to rebalance the budget and ensure investment takes place through projects foreseen by the National Investment Plan.

Dinkic added that Serbia would have a balanced budget in the future; the budget would be made up, to a significant degree, by capital investment, which should influence economic growth and employment, and provide for high growth and balanced regional development. He specially underlined that the rebalanced budget would increase capital expenses threefold; these should now amount to 12% of budget assets.

Dinkic also added that Serbia’s budget was now, for the first time, more oriented towards development than social care, as it is not dominated by salaries and welfare spending; by contrast, capital spending makes up a significant part of it.

By the end of the first day of the sitting, the National Assembly completed joint discussion in principle of the second item from the agenda.

The National Assembly continues its sitting at 10 am on Wednesday 27 September, by discussing the particulars of the proposed laws.