On Wednesday, the second Reform Coalition Summit took place at Brdo pri Kranju. Although they had a discussion on the starting points of four reforms on the agenda, they failed to work on all of them, as they got stuck on the reform that is currently causing quite a stir – the public sector wage system and the housing policy. The tax and school reforms were left on the agenda.
The Freedom Movement (Gibanje Svoboda), Social Democrats (Socialni Demokrati) and the Left (Levica) coalition held its second coalition summit of the year to discuss the reform of the public sector wage system and the reform of the real estate market. In the conclusions that they presented at the press conference, they did not go into much detail, but only the agreed starting points were presented. They also refused to answer journalists’ questions on more detailed measures and figures. Prime Minister Robert Golob tried to clarify some things, but all in all, things are still not clear.
What is coming is what the previous government was already preparing
The coalition agrees that the single-wage system has long been gone. The negotiations will therefore serve as a basis or starting point on which all other measures within the reform will be based. The remaining steps will be presented in more detail presumably next week, when the minutes are ready, starting with the lowest paid. What is on the cards is, in fact, what the Janša government has been working on, namely – several wage pillars, where comparable professions will have their own wage pillars – there will no longer be a single wage system.
The first is that jobs with basic salaries below the minimum wage should be abolished, because this is unacceptable. The second is to increase the ratio between the minimum and the maximum wage to 1 in 7. At present, the ratio between the minimum wage and the wage in the highest, 65th pay grade, is 1 to 4.7. At present, the minimum wage is 1,203 euros gross per month, and the basic gross wage in the 65th pay grade is 5,663 euros. Seven times the minimum wage is 8,421 euros gross. Under the government’s proposal, there would be no minimum wage in the public sector at all, but the lowest wage would be 60 percent of the national average wage. According to the latest figures, this is 2,244 euros gross or 1,480 euros net per month. 60 percent of that is, therefore, 1,346 euros gross or around 900 euros net per month.
The Prime Minister went on to say that housing is best built by the state or by public funds, even though these have only built 2,500 homes in thirty years. It is not clear whether the Prime Minister is joking, because if he is serious, all of the alarms should be ringing. As expected, the coalition is also unanimous that the Housing Fund of the Republic of Slovenia, which must be reinforced with budgetary money, must be the vehicle for action. And budget money will, of course, be “earned” on the backs of taxpayers.
Fajon promises that they will finally get to work
The Social Democrats party President Tanja Fajon did not offer any better explanations than the Prime Minister on the subject, but promised that after seven months, they would finally start working – “we have committed ourselves to an ambitious timetable and to hard work,” Fajon said, because, after almost a year of the current coalition being in power, it does not seem like anything has been done.
Coordinator of the Left party, Luka Mesec, in his socialist manner, added that the market does not work, and from now on, it will be regulated who can build housing in Slovenia. The coalition also announced the creation of an infrastructure for the construction of three thousand new housing units a year from 2026, which they estimate will require around a hundred million euros in budgetary resources a year, with an additional 25 million euros this year alone, which they do not yet know where they will get from. For this reason, they are also announcing a re-balancing of the budget, about which we know that the Fiscal Council has decided each time that it is ‘unrealistic’.
In short, the coalition promises reform sometime in the future, and the public sector will take care of the housing. The first serious explanations were promised within a week, the first serious starting points in April. They do not have a date set by which they will deliver the reform, though.