A Zagreb court ruled on Tuesday that City of Zagreb's decision to cancel the subsidized stay-at-home parent scheme was illegal. Mayor Tomislav Tomasevic, who has been trying to downsize the generous subsidy scheme introduced by late mayor Milan Bandic due to exploding costs, said he was "disappointed" with the ruling.

The latest court decision means that the City would not be able to cut the cost of the scheme by some 300 million kuna (€40 million) in 2022.

A five-member panel of judges of the Zagreb High Administrative Court on Tuesday abolished the current city authorities’ changes the scheme, “assessing that the disputed decision did not have a retroactive effect but was quasi-retroactive,” state agency Hina said, without clarifying.

The stay-at-home parent scheme was introduced by the late Zagreb mayor Milan Bandic in 2016. The scheme envisioned subsidizing parents of families with three or more children up to seven years of age, which was portrayed as a method to help combat demographic decline. However, the effect of the measure in terms of encouraging more people to have children proved to be negligible.

At the same time, the cost of the scheme ballooned 25-fold in just six years, from 21 million kuna (€2.8 million) in 2016 to 528 million kuna (€70 million) in 2022, spent on subsidizing around 5,800 parents.

The new green-left city government, which came into power following the May 2021 election held only a couple of months after the sudden death of longtime controversial populist mayor Bandic, has tried to cut the cost of the scheme by changing subsidy rules earlier this year, so that the city would save around 320 million kuna (€42 million) in 2022.

The move was vehemently opposed by ultra-conservative and right-wing groups, who challenged the decision claiming it was illegal.

“We are disappointed with the court’s decision and will see which legal means we have at our disposal to have it changed. We are glad, however, that there is still legally room for us to overturn the decision,” Tomasevic told reporters on Tuesday.

Tomasevic, a former activist, claimed that the measure was misguided and costly and has repeatedly argued for investing in building up the city’s kindergarten network rather than subsidize stay-at-home mothers.

“We simply cannot tolerate a situation in which more than half a billion kuna of city funds (per year) might be taken up (by this scheme) for the next ten years or so. This is like catch-22: the city’s kindergarten capacity is insufficient because over the past five years 15 times more funds have been invested in the stay-at-home-parent scheme than in building new kindergartens,” Tomasevic said.

If city funds ended up getting tied up in the scheme, “the kindergarten capacity would never be increased,” he said, adding that the city administration was now waiting for another decision which they believe would make room for them to reduce subsidies defined by the scheme, thus securing funds for building new kindergartens.

“The amounts spent on the stay-at-home scheme in a single year would be enough to build 12 new kindergartens, which would be sufficient to take in all the city’s children,” Tomasevic added, saying that his administration would not give up on building kindergartens and having the stay-at-home scheme revised.

A variety of right-wing and conservative groups claimed that Tomasevic couldn’t change the scheme retroactively.

“The court did not dispute that we in fact can change the decision on the stay-at-home scheme even though various political actors claimed this entire time it could not be done because these were vested rights. Evidently, the decision can be changed, and we will indeed change it,” Tomasevic said.

Stay-at-home parents satisfied

The national association of stay-at-home parents Huro and the ultra-conservative group “In the Name of the Family” said on Tuesday they were pleased with the court decision, while the political party of late mayor Bandic used the occasion to call for Tomasevic to step down.

Head of Huro, Ana-Marija Berbic-Lacko said the court decision meant that stay-at-home parents would continue enjoying the same rights as before. She added that when deciding to abolish the scheme the city authorities did not offer any compensation or employment measures for parents who would be taken off the scheme.

“The City could continue working on compensation ideas to allow parents to leave the scheme on their own volition,” she said.

Leader of the In the Name of the Family conservative group, Zeljka Markic, called it “a victory for moms and dads and the family, and a defeat for the autocratic and incompetent Tomasevic.” She added that she expected Tomasevic to step down now, while Nenad Predovan, a city deputy from the late mayor Bandic’s populist party said that they would insist “on Tomasevic’s responsibility.”

(€1 = 7.52 kuna)