development report 2012 - UMAR

48 Development Report 2012
Development by the priorities of SDS – An efficient and less costly state
In 2008–2011, compensation of employees, which in
terms of general government expenditure accounts
for over 12% of GDP, increased despite restrictions.
After several years of steady growth, compensation
of employees reached its lowest level in 2007 (10.5%
of GDP). Following the partial realisation of the 2008
wage reform, compensation increased by 0.5 p.p. and by
another 1.5 p.p. of GDP in 2009. The increase was partly
due to a fall in GDP. Despite the adoption of measures
to freeze wages in 2010, compensations of employees
rose by 2.3% in nominal terms (0.2% of GDP), and, at
employment growth of 0.4% in 2011, it stayed at the
relative level of 2010. In terms of individual functions,
their growth in 2010 121 varied. The growth was very
slow in defence, health and general public services;
a considerable increase was recorded in research
activities, recreation, culture and social protection, while
the increase was slightly lower in education, public order
and safety. The increase in compensation of employees
was also on account of growing employment which
in general government expenditure 122 rose by 1.5% in
2010 compared to 2009 and by 3% since 2008. In 2009,
Slovenia’s compensation of employees, expressed as
a share of GDP, was substantially higher than in the EU
(Slovenia: 12.5% of GDP; EU: 11.3% of GDP); before wage
reform (2007), it was almost at the same level. A higher
Slovenia’s share of expenditure than the EU average
results from a slightly higher share of employment in the
general government sector.
Nearly one third of compensation of employees in 2010
is accounted for in education and a good fifth in health,
and by a tenth in the areas of public administration,
public order and safety. Compensation of employees in
education sharply rose in nominal and real terms until
2006, while in subsequent years it gradually decreased
their share in the structure of total expenditure. In 2010,
the downward trend stopped; as the employment
increased, their structural share again slightly increased.
In health, compensation of employees diminished their
structural share in the period until 2007. On account of
wage reform, they increased more than with respect to
other functions, which caused their dramatic increase in
2008 and 2009. In 2010, the compensations remained at
the 2009 year’s level, their share in the structure of total
expenditure on compensation of employees decreased.
Compensation for public administration employees
has been particularly limited in the last two years and,
as a result, their structural share has been in a severe
downturn since 2007. Compensation of employees in
the area of public order and safety has slightly increased
in the past two years, but have decreased in the area of
defence. The share of other compensation recipients is
smaller and their growth varies. Structural shares rose
in social protection and recreation, culture and religion,
and research activities. The personnel expenditure
structure in Slovenia differs substantially from that in the
EU 123 , which also depends on the way in which activities
between the public and private sectors are financed 124 .
Table 4: General government expenditure on compensations of employees by function, structure in %
2000 2005 2006 2007 2008 2009 2010
General government expenditure on
compensations of employees
100.0 100.0 100.0 100.0 100.0 100.0 100.0
General public services 11.5 12.2 12.4 12.5 12.3 11.7 11.6
Defence 5.3 6.3 6.4 6.5 6.7 6.7 6.4
Public order and safety 10.5 9.7 9.5 9.5 9.4 9.5 9.5
Economic affairs 3.9 3.9 3.9 3.9 3.8 3.8 3.8
Environmental protection 0.6 0.9 0.9 0.9 0.8 0.8 0.7
Housing and community amenities 0.6 0.6 0.6 0.6 0.6 0.6 0.6
Health 23.3 20.6 20.3 20.3 20.7 21.5 21.3
Recreation, culture and religion 3.3 3.3 3.3 3.3 4.5 4.6 4.8
Education 33.6 34.9 35.1 34.8 33.4 32.6 32.7
Social protection 3.9 4.5 4.6 4.7 4.7 5.2 5.4
Research activities 3.5 3.1 3.1 3.1 3.0 3.0 3.1
Source: General government expenditure by function, Slovenia, 2011 (SORS).
Note: Expenditure on R&D is found at a different level of classification in all ten classes (in all other classes such expenditure was deducted).
121
There are no data for 2011.
122
According to national accounts, employment in 2010
increased the most in education and the least in public
administration, defence and compulsory social security sector;
compared to 2008, the highest employment rise of 4.5% was
recorded in education, health care and social assistance while
the lowest employment rise was recorded in the activities of
public administration, defence and compulsory social security.
123
In the European context, Slovenia stands out by higher
expenditure on employees in education (by 0.6 p.p. of GDP in
2009) and health (0.7 p.p. of GDP), and by significantly lower
expenditure on social protection (by 0.4 p.p. of GDP).
124
The ratio between the general government sector and the
private sector in Slovenia is changing very slowly. In 2005, the
private sector accounted for 7.5% of employees providing
these services; in 2010, it accounted for 8.4% According to our
estimates for 19 EU Member States (excluding Bulgaria, Cyprus,
Lithuania, Latvia, Luxembourg, Malta, Romania and the United
Kingdom), the share of private providers accounts for 28%.