They argued that with consumer price inflation likely to exceed 5 percent in 2012 the hundreds of thousands of civil servants, pensioners and other socially vulnerable categories of the population would be paid less in real terms.
A government bill submitted to the National Assembly this week would raise public spending by about 5 percent to 1.05 trillion drams ($2.8 billion) and at the same time slash the budget deficit to a level equivalent to roughly 3 percent of Gross Domestic Product. To that end, the government would have to raise its 2012 tax revenues by 13 percent.
“We are registering regress in real revenues,” said Artsvik Minasian, an economist and parliament deputy from the Armenian Revolutionary Federation (Dashnaktsutyun). “When there is no increase in the public sector salaries, with this inflation rate that means people will actually be worse off.”
Speaking to RFE/RL’s Armenian service (Azatutyun.am), Minasian dismissed government claims that the economic situation in the country does not allow for a more sizable increase in budgetary expenditures. He said the allegedly undertaxed mining industry alone could bring 70 billion drams in additional revenues to the state budget.
“Socially vulnerable categories will be worse off in the first instance,” agreed Bagrat Asatrian, a former Central Bank governor close to the opposition Armenian National Congress (HAK).
“You can’t fail to pay civil servants well and expect them to be honest,” he said. Asatrian also brushed aside government plans to raise the minimum monthly pension by 2,500 drams.
“This budget is a message to all citizens to take care of themselves and pin no hopes on the authorities,” Armen Martirosian, a leader of the opposition Zharangutyun (Heritage) party, told RFE/RL’s Armenian service (Azatutyun.am).
Gagik Minasian, the pro-government chairman of the parliament committee on finance and economy, rejected the criticism. In particular, he argued that as well as keeping public sector salaries unchanged the government plans to introduce other benefits for civil servants that will lower their expenditures on healthcare, education, housing loans and even recreation.
The proposed budget sets aside 18 billion drams for the benefits package.
“Of course, that’s not enough,” said Deputy Finance Minister Pavel Safarian. “But that’s what we have.”
“I wish we had more funds. Who wouldn’t?” he told RFE/RL’s Armenian service (Azatutyun.am).
With President Serzh Sarkisian and his governing coalition controlling the vast majority of parliament seats, the budget is likely to be passed without major changes before the end of this year.