Government supports implementation of development law

The government of Slovenia has approved a proposal for a constitutional referendum on the Development Law, which will take place on December 6, 2026. The decision was made during a session of the National Assembly's committee for finance and coherence with President Zoran Stevanović. The formal approval of the referendum will be decided at an extraordinary session of the National Assembly. State Secretary for public assets and financial system Peter Papež stated that the government has no objections to the proposed decision. He emphasized that voters will decide on the content of the law itself, not on fears raised by the opposition, unions, and non-governmental organizations. Papež clarified that the law does not introduce new taxes, reduce pensions, or impose additional contributions. Instead, it provides benefits for retirees, young people, and families, while also supporting the economy. According to Papež, the law includes permanent reductions in VAT on basic food items such as butter, eggs, meat, fruits, vegetables, oil, and sugar. These items are essential components of daily meals. Bread is currently statistically one-third more expensive than at the end of 2022, making the reduced VAT particularly beneficial for families and retirees. The law also allows for lower VAT on wood while regulating prices to benefit consumers. Retirees will not lose their long-term care contribution from their pension, meaning a person receiving €1,000 in pension would receive approximately €120 more annually. The law introduces a dual status for medical staff who meet certain conditions and wish to continue working, allowing them to receive both their full pension and salary. For young people and families, a 5% tax rate instead of 25% applies when transferring property to a family member or young person under 30, encouraging the release of vacant properties. Healthcare professionals can work more hours to reduce waiting times. A development or social cap at €7,500 gross monthly income affects around 13,000 professionals, aiming to keep them in Slovenia, pay contributions, and strengthen the competitive environment. The law aims to improve living standards and promote the development of Slovenia. It does not take anything away from individuals, does not introduce new taxes, and does not reduce pensions. On the contrary, it brings measures that can improve people’s lives and ease the burden on the economy. Left-wing political groups, unions, and associated non-governmental organizations have spread claims that do not align with the content of the law. Papež's explanations directly refute these claims. The claim that the law benefits only the wealthy or rewards the richest is incorrect. In addition to already mentioned measures, the law reduces the minimum insurance base for self-employed individuals and farmers with low incomes (up to 45% of the minimum wage), introduces better conditions for micro-enterprises with low incomes, and abolishes the long-term care contribution for part-time workers, freelancers, and some other low-income groups. These measures affect self-employed individuals, farmers, and small businesses, not high-income groups. The cap at €7,500 gross monthly income affects slightly less than 13,000 individuals according to estimates by the Fiscal Council, aiming to retain highly qualified personnel who otherwise leave for foreign countries where they pay contributions elsewhere. Claims that the law means the dismantling of the social state and threatens funding for healthcare, education, and social services are unfounded. The law does not prescribe any cuts to public services, does not reduce pensions, and does not introduce new taxes. Proposals estimate the effect to be around €571 million.