€2.8bn aid package presented

Prime Minister Andrej Plenković on Thursday unveiled the government's autumn package of measures to protect households and businesses against rising energy and food prices.

The value of the package is nearly HRK 21 billion (€2.8bn), and it contains measures aimed at mitigating the impact of rising energy and food prices, subsidies and aid for households and the public and private sectors.

Presenting the package at a cabinet meeting, Plenković said that the government was bringing in a "powerful, fair and comprehensive" programme to protect people's living standards, safeguard the function of public institutions and maintain the high economic growth rate.

He said the programme was mostly aimed at those hardest hit by increased prices and those most in need. "We are redistributing what we have in a fair way," he added.

Mitigating the impact of increased energy prices

Under the latest package of measures, from 1 October 2022 to 31 March 2023, households will pay €59 per megawatt-hour for consumption of up to 2,500 kilowatt-hours of electricity and €88 on average for consumption above that threshold.

The households category will include kindergartens, schools, universities, retirement homes, non-governmental organisations, religious communities, municipalities and towns. They will be subject to a universal tariff of €62/MWh.

Businesses that consume less than 250,000 kWh over the next six months will pay HRK 0.52 (€0.07) per kWh and those that use more will pay €1.76. Large consumers that use more than 2.5 gigawatts will be subject to a tariff of €250/MWh.

Natural gas prices for households will be limited until 31 March 2023.

As regards heating energy, the unit price for 160,000 households and businesses with central and closed heating systems will remain unchanged.

The government also prepared a HRK 1.1 million (€147,000) aid package for those that use wood as a heating fuel, and the prime minister announced that the price of gas in cylinders would be capped next week. 

Increasing non-taxable receipts, payments to pensioners

Non-taxable special rewards are increased from HRK 3,000 (€400) to 5,000 (€667) annually, and rewards for work performance are increased from HRK 5,000 to 7,500 (€1,000).

Non-taxable lump-sum amounts to cover workers' food expenses are increased from HRK 5,000 to 6,000 (€800) annually, and non-taxable pension severance pay is increased from HRK 8,000 (€1,066) to 10,000 (€1,330).

130,000 recipients of child benefits will receive a one-off payment of HRK 300 (€40) for one child, HRK 500 (€67) for two children, HRK 700 (€93) for three children, HRK 900 (€120) for four children and HRK 1,100 (€145) for five children..

Pensioners with a monthly pension allowance of up to HRK 1,850 (€247) will receive a one-off payment of HRK 1,200 (€160), those with a pension of between HRK 1,850 and 2,350 (€313) will get HRK 900 (€120), those with a pension of between HRK 2.350 and 3,350 (€447) will receive HRK 600 (€80) and those with a pension of between HRK 3,350 and 4,360 (€581) will be paid a one-off amount of HRK 400 (€53). The total amount of this measure is HRK 450 million (€60m).

Unemployed persons registered with the Croatian Employment Service on 1 September will be paid HRK 250 (€33) monthly for October, November and December.  

Vulnerable energy buyers will see their allowance increase from HRK 400 (€53) to HRK 500 (€67). The same increase will apply to foster parents.

Funding for the "Make a Wish" programme aimed at employment of women will be increased by HRK 245 million (€33m).

Non-taxable receipts for students will be increased from HRK 15,000 (€2,000) to HRK 24,000 (€3,200) for receipts received in 2022.

The government prepared a HRK 100 million (€13.3m) aid package for farmers, and the same amount was also set aside for fishermen.

Transport operators will receive HRK 1.47 per litre of diesel, and nearly HRK 1 billion (€133m) will be allocated for energy efficiency of houses and apartment buildings.

The government will encourage the construction of solar power plants and heating stations, and will abolish the VAT on the construction and delivery of solar panels. 

HRK 3.8 billion (€507m) was earmarked for loans and guarantees to businesses and HRK 3.1 billion (€413m) for guarantees to exporters.

Prime Minister Plenković said that this package would protect households, the public and private sectors and the economy and ensure them "a peaceful and predictable autumn and winter."

He announced that the government would propose introducing a special profit tax for those generating considerable profits in the present crisis. "That's the principle of fairness. This is no time for excessive profit, it is morally unacceptable now."

Text: Hina