HDZ, plenkovic.jpg
Photograph: Hina/ Dario GRZELJ/ dag

A lower VAT, an increase in salaries, the write-off of debts for citizens with blocked bank accounts and changes to the Distraint Law are some of the promises the Croatian Democratic Union (HDZ) makes in its platform entitled "Economic growth, new jobs and social equity", presented at a news conference in Zagreb on Wednesday.

The HDZ's candidates will bring about economic growth, create 180,000 new jobs and raise the employment rate to 68% by 2020, HDZ leader Andrej Plenkovic said while presenting the platform, which, he said, would make Croatia a prosperous and organised country in the next four years.

The platform, elaborated on some 100 pages, focuses on three topics - economic growth and new jobs; demographic revival and building of state institutions; and social equity.

Plenkovic said the planned 5% growth would help ease the tax burden on citizens and expand their entitlements while at the same time contributing to a lower public debt.

"Debts of citizens with blocked bank accounts will be immediately written off," said HDZ vice-president Ivana Maletic, explaining that this referred to debts towards the state, local self-government units, and utility and state-owned companies.

The debt write-off would refer to the debt principal in the amount of one average salary.

If the HDZ comes to power, the Distraint Law will be amended to ban the seizure of a person's sole property, increase the part of income that cannot be subject to distraint and lower the fee for distraint proceedings, Maletic said.

Under the platform, the implemented conversion of loans pegged to the Swiss franc into euro-denominated loans will not be changed, the current, 25% VAT rate will be lowered to 24% in the second year of the term, and to 23% in the last year of the government term, and the non-taxable part of income would be raised to HRK 3,750, which would result in an increase in salaries.

"We will implement an integral, comprehensive reform of the tax system which is currently unclear, uncompetitive and unstable," said outgoing Finance Minister Zdravko Maric, announcing income and profit tax benefits.

The loss of revenue for local self-government units, expected to result from a higher non-taxable part of income, is to be compensated for with revenue from tax on real estate transactions. Apart from increasing the non-taxable part of income, the platform also envisages the introduction of more tax brackets and lowering the highest income tax rate from 40% to 36%.

Maric said that if the HDZ came to power, the public debt would be reduced owing to economic growth, fiscal consolidation and the activation of unused state property.

This year Croatia saw a drop in public debt for the first time ever, and we will make sure the debt continues to decline, said Maric.

Maletic announced the revitalisation of the industrial sector and assistance to entrepreneurs in creating new jobs.

Among the planned measures to create a favourable business climate are loans to young people starting a business in the amount of up to HRK 350,000, and the compilation of an investment map containing information for business people on investment costs, necessary permits and possible incentives in different parts of the country, she said.

The HDZ also plans farming incentives, the establishment of a farm bank, and a lower VAT on farm products and services. The farm bank would provide favourable funding for small farmers, enable the rescheduling of existing loans and offer loan repayment delays and better loan terms. It would also help in the development of the fisheries in order to double its existing production capacity, it was said.

As for education, the party plans to resume the curriculum reform and insist on linking the education system with the labour market.

Plenkovic dismissed "insinuations that the (curriculum) reform has been stopped. A public debate on it is still under way. It is our goal to reconcile different views and educate young people who will be competitive on the labour market," Plenkovic said, announcing an increase of budget allocations for science to seven billion kuna.

He also promised the reform of public administration, legal security for citizens and better court efficiency, faster proceedings related to property-rights relations, and the eradication of corruption.

Maternity and parental allowances are to be increased for the second half of the year-long maternity leave and the HDZ's platform also envisages the right to a salary for stay-at-home parents with a minimum four children.

The HDZ's platform again mentions the HRK 7,500 one-off allowance for newborns, a measure which the party had in its platform for the 2015 election but the outgoing government, composed of the HDZ and Bridge party, failed to implement.

Plenkovic also announced a reform of the welfare system to eradicate poverty and the definition of the minimum income to be guaranteed to every citizen.

The price of supplementary health insurance will not be increased owing to stronger economy and new jobs, and participation fees in the health system will not rise either, Plenkovic said.

As for senior citizens, the HDZ promises to introduce "a national pension allowance" in the amount of 40% of the minimum salary for people aged above 65 who were unable to work. Those pensions would be adjusted to salary growth on a permanent basis and the HDZ believes that by the end of its term, they would go up 5%.

The party also plans the adoption of a single law to define all rights and entitlements of Croatian war veterans and the restoration of their entitlements that have been cancelled.

The HDZ's platform also envisages support to Southeast European countries aspiring to join the EU and trans-Atlantic associations.

The platform is based on a study by the German IFO institute, and was made by a team of HDZ economic experts, headed by Ivana Maletic.

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