Şimşek says public sector spending needs checking

ISTANBUL - Anatolia News Agency

Government ministries should not expect any additional payments this year, as they have in the past, when the government embarked on ambitious investments relying on a strong tax base, Finance Minister Mehmet Şimşek said on a television program yesterday.

“The approach that we will just keep spending and then be reimbursed by the Finance Ministry is very wrong,” said Şimşek, adding that no one should build their hopes up about a cut in the special consumption tax.

“Let me be frank and honest. Our first priorities are investment, employment and exports. This country can only develop and grow on the back of these,” he said. “With consumption, we will only be indebted. If we consume, this means an increased current account deficit and debt.”

Şimşek said that while populist measures could please citizens in the short-term, they would not lead to long-term growth and prosperity.

When asked about the public sector, Şimşek said that it had a propensity to spend if left unchecked.
“While our Finance Ministry is trying to keep everything in order by curbing spending, the rest of the ministries are busy trying to spend,” he said.

Şimşek said the government would still fund important investment and social programs, but that they would need to keep revenues in mind when budgeting.

With regard to projections about the 2012 budget, Şimşek said they might not be as successful as 2011, since a huge part of the nation’s resources, an addition 11 billion liras, had gone towards the Van earthquake victims as well as infrastructure spending and education.