Unakitan Presents Budget Of 2004 To Parliamentary Planning And Budget Commission

ANKARA - Finance Minister Kemal Unakitan said on Monday that Turkish economy grew despite Iraq issue and economic stagnation in the world.
Finance Minister Unakitan, who presented the budget of 2004 to Parliamentary Planning and Budget Commission, said that the year 2003 was a critical year for the world especially for the region where Turkey was situated and continued to be so.
Unakitan noted that developments in Iraq had negative effect on the world and global economy.
No revival was recorded in developed economies particularly in Euro region in 2003, Unakitan stated.
Unakitan said that recent figures showed that U.S. economy had started to revive but that high budgetary and current deficits and consumer debts threatened economy.
Oil and gold prices were affected by geopolitic developments at a great extent, Unakitan pointed out.
Unakitan said that another important development in 2003 was the fight between Euro and dollar.
Turkey should be economically strong since it was situated in a troublesome region and geography which was a bridge between the east and west and between north and south, Unakitan stated.
Unakitan went on saying, ''there is a necessity to save our country from serious and almost chronic problems like instability and irregular growth rate, high unemployment rate, unbalanced distribution of income, high inflation and heavy public debt stock. It is our main aim to normalize economy, have a strong public finance, reduce burden of public sector on financial markets, relieve investments of private sector, decrease inflation and have a stable growth rate'' and later told about initiatives exerted to revive economy which was obstructed by crises.
''Our economy continues to grow despite Iraq issue and economic stagnation in the world,'' Unakitan said.
Unakitan noted that Turkey recorded a growth rate of 5.4 percent in the first half of 2003 and the Gross National Product (GNP) grew by 7.4 percent in the first quarter and 3.7 percent in the second quarter. The growth in agricultural sector in the first half of the year was 1 percent, in industry, it was 5.9 percent and in services sector, it was 6.3 percent, Unakitan stated.
Unakitan pointed out that capacity usage rates, rise in production indices and developments in foreign trade indicated that the growth rate target for 2003 would be reached.
Stating that fight against inflation was continued successfully, Unakitan said that developments and expectations showed that targets would be achieved by the end of 2003.
Unakitan noted that developments were significant, but they knew that they should not be content with those developments.
''Our aim is to reduce inflation rate to one-digit figure and make this decrease permanent,'' Unakitan said.
Unakıtan said that the decrease in interest rates was promising, adding that there was no change in the government's resolution to save itself from debt-interest rate problem.
Noting that the public deficit should not exceed 3 percent of Gross Domestic Product according to EU Maastricht criteria, Unakıtan stated that ''our fight to decrease internal debt stock and to decrease the share of interest rates of debts continues.''
Unakıtan said that the budget expenses increased by 43.6 percent to 115.7 quadrillion liras, the budget incomes increased by 46.7 percent to 75.6 quadrillion liras and the budget deficit increased by 38.1 percent to 40.1 quadrillion liras in 2002 budget when compared to 2001 budget figures.
The results of the budget practices between January-September, 2003 were in line with non-interest surplus target, he said, adding that the consolidated budget expenses were 101.6 quadrillion liras, and the consolidated budget revenues were 71.8 quadrillion liras. Finance Minister Unakıtan stated that the budget deficit was 29.8 quadrillion liras, the non-interest surplus was 16.7 quadrillion liras. Unakıtan noted that the budget expenses would be 4.9 quadrillion liras less than it was expected and the budget incomes would be 500 trillion liras less than expected when compared with the 2003 year early payments.
He noted that they would exceed 5 percent primary surplus target worth of 17 quadrillion 852 trillion TL which was determined for consolidated budget with arrangements and measures in budget allocations against deviation in income and expenditures.
Stating that they would reach 6.5 percent primary surplus target which was determined for whole public sector, Unakitan said that personnel expenditures would show 576 trillion TL of deviation, tax refund would show 1.8 quadrillion TL of deviation, transfers to social security institutions would show 1.2 quadrillion TL of deviation, enterprise transfers would show 482 trillion TL of deviation and agricultural support payments would show 235 trillion TL of deviation in budget expenditures.
Unakitan said that budget of this year reached a great success and it was an important performance and stated that the budget was successful due to the ''financial discipline'' which was implemented without concession.
2004 BUDGET WILL BE A BUDGET THAT WILL PUT INTO PRACTICE A NEW CONCEPT IN TURKISH BUDGET HISTORY
Stating that financial discipline concept would also remain as the basic priority in 2004, he said that 2004 was announced as the year of fight against unregistered economy.
Unakitan said that special transaction tax and special communication tax would not be temporary.
Unakitan said that the government aimed to reduce inflation rate to one-digit figure, decrease public debt stock, increase production and exports, decrease unemployment and reach stable growth performance.
Noting that Gross National Product (GNP) was targeted as 419.7 quadrillion Turkish liras (TL), growth rate was targeted as 5 percent, GNP deflator was targeted as 11.9 percent, wholesale prices and consumer prices were targeted as 12 percent in 2004 budget, he said that they aimed to reach 51.5 billion U.S. dollars in exports and 75 billion U.S. dollars in imports according to the 2004 budget.
Stating that analytic budget categorization based on functional categorization was being put into practice with 2004 year budget, he said that the most important part of this new budget categorization was to analyze effect of public expenditures on economic activities and make international comparisons. Unakitan stated that budget code system was reaching a structure complying with international standards and the European Union (EU) norms and added that thus, it fulfilled requirements of 2003 year Accession Partnership Accord and National Program.
He noted that expenditures would be 160.9 quadrillion TL and incomes would be 114.5 quadrillion TL in 2004 year budget and added that budget deficit would be 46.4 quadrillion TL. Unakitan said that primary surplus would be 19.8 quadrillion TL in 2004 year budget.
Finance Minister Unakıtan said that the payments envisaged in the year 2004 were determined in line with basic priorities and needs of public services, adding that more sources were allocated to education, health and exports when compared to the budgets of previous years.
''In the 2004 budget, 35.3 quadrillion liras have been allocated for personnel expenses, 9.9 quadrillion liras for other current expenses, 7.6 quadrillion liras for investment expenses, 108.2 quadrillion liras for transfers,'' Unakıtan said.
Unakıtan noted that the interest rate burden on budget gradually decreased due to ensuring of political stability, financial discipline, and resolution of the government in implementing the economic programme.
Giving information about the characteristics of the 2004 year budget, Unakıtan stated that financial discipline would be totally implemented in the public sector according to the bill on the budget of 2004.
Finance Minister Unakitan said that rises in salaries of civil servants were determined by taking into consideration budget possibilities and inflation targets.
Unakitan noted that coefficients to be used in the second half of the year were also determined by the budget law.
The government decided to increase salaries of civil servants by 6 percent in the first half of 2004 and again by 6 percent in the second half, Unakitan stated.
Unakitan said that salaries would averagely increase by 13.8 percent in 2004 and the cumulative rise would be 12.4 percent.
An additional 160 million Turkish liras (TL) would also be paid to the civil servants in two installments on dates to be set by the Council of Ministers, Unakitan pointed out.
Unakitan said, ''salaries of the lowest ranking civil servants will increase from 428.1 to 454.2 million TL as a result of 6 percent rise in January of 2004. Pension of the retired will be increased between 6.4 and 7.9 percent which is a higher rise when compared with working personnel. The lowest pension will be increased from 448.5 td 483.8 million TL.''
Finance Minister Unakitan announced the year 2004 as ''the year of fight against unregistered economy.''
It was the right time to start fight against unregistered economy, Unakitan said.
Unakitan noted, ''our country can no more tolerate tax evasion and loss. Moreover, tax evasion can't be justified. Therefore, I would like to clearly state that those who pay their taxes on time will face good days in 2004 while those who evade tax will have bad days.''
''One of priorities in fight against unregistered economy is to strengthen tax departments and develop technological infrastructure. Within this scope, tax department automation project will be put into practice. This project aims at increasing automation in tax departments, submitting declarations through internet, forming tax data house to register unregistered economy, and automating audit,'' Unakitan said.
Unakitan recalled that almost 56 percent of tax revenues were collected through banks and said that the government aimed to collect all taxes through banks.
A pilot project was put into practice in Ankara to reach that aim, Unakitan stated.
Unakitan noted that they expected an income of almost 1.2 quadrillion TL through Tax Peace Project in 2004.
Finance Minister Unakitan said that special transaction and special communication taxes would also continue in 2004.
Unakitan pointed out that the government would save 2 quadrillion TL within the scope of special income-special appropriation practice in 2004.
The government would continue its tax policies without any concessions, Unakitan added.
(EÖ-ÖŞ-BRC-AÖ) 27.10.2003