122nd regular session of the Government of the Republic of Slovenia

SLOVENIA, September 26 - The Government approved the proposed amendments to the state budgets for 2025 and 2026 with the corresponding budget documents. The budgets follow the Government’s medium-term fiscal and structural framework, prioritising, among other things, measures to strengthen the development of the economy, healthcare, innovation and housing policy. In drafting the budgets, the Government took into consideration the draft Medium-term fiscal and structural framework of the Republic of Slovenia 2025–2028, the autumn economic forecast of the Institute of Macroeconomic Analysis and Development and the envisaged implementation of the Recovery and Resilience Plan, the EU Cohesion Policy as part of the Multiannual Financial Framework for the period 2021–2027 and other EU documents. In addition to measures to deal with the consequences of last year's floods, the budgets focus on measures aimed at strengthening the Slovenian economy, healthcare, knowledge, innovation and housing and climate policies based on the abovementioned EU documents.

In 2025, the planned revenues amount to EUR 15.2 billion and the planned expenditure to EUR 17.1 billion. Compared to last year’s budget for 2025, revenues are 4.6% and expenditure 8% higher. The planned government deficit is EUR 1.9 billion or 2.6% of gross domestic product (GDP).

In 2026, the planned revenues amount to EUR 15.9 billion and the planned expenditure to EUR 17.1 billion. The government deficit is therefore expected to be lower than in 2025, amounting to EUR 1.2 billion or 1.6% of GDP.

The Government also approved the proposed Act Regulating the Implementation of the Budgets of the Republic of Slovenia for 2025 and 2026, containing a 5.2% adjustment of allowances and the scale for personal income tax assessment for 2025, as unanimously agreed upon by the representatives of employers, trade unions and the Government last week. Based on the adjustment, employees will receive higher net salaries next year. The annual bonus for pensioners will again be paid out in varying amounts next year, namely five different amounts ranging from EUR 155 to EUR 465. The proposed Act also determines the lump sum grants to municipalities for 2025 and 2026. As discussions are still ongoing and the agreement on the amount of the lump sum has not been agreed upon with the associations of municipalities, the final amount will be determined in the course of adopting the Act Regulating the Implementation of the Budgets in the National Assembly, as is the case every year. The proposed Act currently specifies a lump sum in the amount of EUR 725 per capita for both years, which is the amount from last year’s agreement signed with the municipalities.

The Government adopted the proposed Act on the Common Foundations of the Salary System in the Public Sector (ZSTSPJS). The proposal represents a milestone that will improve the regulation of the salary system in the Slovenian public sector. The proposed Act, which includes a new pay scale and the method for translating the pay grades of existing posts and titles into the new pay scale, brings many important improvements and with it a strategic shift to a more dynamic, flexible and fiscally sustainable system which, in the long run, will improve working conditions in the public sector and contribute to employees’ greater efficiency and motivation.

The key part of the proposed Act is the new pay scale, which sets out 67 pay grades, with the range between pay grades determined as a nominal value amounting to 3%. The first pay grade is set in the amount of the minimum wage for 2024. The system of public sector salary increases will be adjusted to inflation and, for the first time in history, systemically regulated. The pay grade values will be adjusted once a year and the amount of the adjusted value of the pay scale grades will be negotiated by 1 April 1 of each year; if an agreement is not reached by the relevant date, the pay grade values will be adjusted by 80% of the growth in consumer prices. Salaries will increase gradually so that the lowest-paid public employees will be the first to benefit from higher salaries and so that no public employee receives a salary lower than the minimum wage upon entering the new salary system and subsequently. The transition to the new pay scale will take place from 1 January 2025 to 1 January 2028, namely in 6 instalments, taking into account the fiscal framework. Among the many improvements, the new Act brings greater flexibility in determining the salary amount for employees with relevant experience, special skills and competences. The proposed Act aims for more stimulative remuneration of employees with higher performance results and a greater workload. The Act provides for the integration of a performance-related bonus payment for regular work and overtime, thus relieving the administrative burden and simplifying the system, as well as enabling more transparent variable pay that also prevents the possibility of double payment for the same work. The proposed Act also ensures the full implementation of Constitutional Court Decision No. U-I-772/21-37 of 1 June 2023 pertaining to the unconstitutionality of judges’ salaries. As regards the adjustment of the values of pay scale grades, the salaries of public employees will be adjusted first. The Government decided today to propose to the National Assembly that the officials of the Government of the Republic of Slovenia, the National Assembly and the National Council obtain the right to a higher salary only at the beginning of the term of the relevant body. Based on the Government’s proposal, the salaries of other officials, including in the judiciary, would be adjusted gradually, similar to the salaries of public employees.

The proposed new amendments to the Deposit Guarantee Scheme Act increase the target level of the deposit guarantee fund or the required amount at the fund’s disposal by the end of 2030. The members of Slovenia’s deposit guarantee scheme are all banks and savings banks headquartered in Slovenia and, under certain conditions, the banks of third countries that have obtained authorisation to establish a branch in Slovenia. The coverage for an investor’s deposits with one bank amounts to up to EUR 100,000; in exceptional cases, the guaranteed amount can also be higher. The funds for the payment of deposit guarantees in the event of bank or savings bank failure are ensured from the deposit guarantee fund managed by the Bank of Slovenia. The proposed new amendments to the Act raise the target level of the fund that must be reached by 31 December 2030 from the current 0.8 to 1.5% of the total sum of guaranteed deposits in Slovenia. Furthermore, in order to ensure the payment of deposit guarantees in the event of bank or savings bank failure, funds can also be drawn from a fund established based on the Bank Resolution Authority and Fund Act, whose future operation will be regulated in the amended Resolution and Compulsory Winding Up of Banks Act, approved by the Government last week and submitted to the legislative procedure. This will significantly reduce the risk that, in the event of a bank or savings bank bankruptcy, the funds for the payment of deposit guarantees cannot be ensured within the statutory time limit, which is essential to retaining public trust in the banking system’s stability and robustness.