Seimas Committee of Economics Chairman Virginijus Sinkevičius notes that the current government is prepared to cooperate with the private sector to find the best decisions for the country. At the same time the politician stresses that primarily members of Seimas are to represent the public interest.
Tomorrow representatives from the government and private sector will participate in the Lietuvos Žinios conference “Private and Public sector dialogue. What language to interact in?” V. Sinkevičius will be making a statement in it and he is convinced that the cooperation between the private and private sector is inevitable and crucial.
“It would be abnormal if the government was not communicating with the private sector or stakeholders in various matters. We criminalise business, but we do not criminalise cases where we have union representatives dropping by. They too come with specific interests in mind and that is fine. If politicians and heads of ministries do not interact with stakeholders, it will be a massive disconnect,” V. Sinkevičius said.
Rampant bureaucracy as an obstruction
According to the committee chairman, dialogue between the public and private sectors does exist. The government’s job in this dialogue, he explains, is to “allow businesses to work, earn, sustain themselves and to create favourable conditions for operation.”
As one of the core problems of the public – private interaction, Sinkevičius highlights the problems within the bureaucratic mechanism, which currently brings forth excessive administrative burdens for business.
Given that Lithuania is seeking to become the most competitive country in Eastern and Central Europe in terms of business conditions, the member of Seimas stresses that it is important to be rid of certain absurd regulations. As one of these he points to the requirement for company names in Lithuania to be approved by the State Lithuanian Language Commission or the fairly restricted tax regime due to the current Fiscal Discipline Law. Another criticism Sinkevičius has for the current regulations is what he sees as excessive labour taxation and overly complex procedures within state tax agencies.
More innovative economy needed
The chairman also outlined a number of accomplishments made during his tenure so far, ranging from the reduction in the duration of procedures for environmental impact evaluation to liberalising legislation regarding special economic zones, shifting from a model where only specific activity is permitted in the zones, to one where everything, but prohibited activity is allowed, which is to make the country’s special economic zones more competitive.
Nonetheless he turned to criticise the arrangements of the current education system, stressing that there are numerous employers prepared to pay large wages to employees, but there is a lack of qualified specialists for the positions, with universities preparing specialists of specialisations in low demand already.
Overall the member of Seimas summarises the situation as needing two main tasks to be accomplished – reducing the extent of bureaucracy and reducing administrative burdens on businesses. This is to both allow the private sector to operate more freely and to help the economy become more innovative, giving greater added value; shifting from exporting raw materials to export of manufactured goods.
The need for balance
When queried about the issues of constant shifts in the Lithuanian tax system, Sinkevičius pointed out that the Skvernelis government has upheld its commitment to present outlines of planned tax reform half a year ahead of their implementation to allow adequate time to prepare.
He highlights that while the interaction of private and public sectors is inevitable and crucial, the country has had some bad experiences in this regard. Such matters should be normal practice, just done with more transparency, rather than establishing a disconnect.
“Of course the interest of business will always be profits. My interest, however, is jobs and generating tax revenue. We have to find a balance,” Sinkevičius summarised.
To this end he calls for business associations to not be intimidated by the changes and confusion ongoing in the Seimas due to fundamental shifts. He describes the new Seimas as more open and transparent, something he cites as confirmed by the President herself. V. Sinkevičius is certain there will be much interaction over the coming few years, just that there is a need to develop mutual trust and confidence.