The Croatian parliament on Friday amended the Act on Salaries in Local and Regional Government Units, regulating the budget restrictions on salaries for employees of municipalities, cities and counties.

The wage budget allocated for the salaries of employees in local and regional government, which is now at 20%, should not exceed 18% of the revenue of a government unit generated in the year preceding the budget year.

The amendments adopted on Friday enter into force eight days after the publication in the Official Gazette.

Although it may seem this is less favourable for municipalities, cities and counties, government representative Josip Salapic said earlier in parliament that it was actually better. The 20% had included the funds that are no longer included in the revenue of those units, so the allocation of 18% means they actually get more, Salapic said.

The same limit is introduced in units that in the year preceding the budget year received fiscal equalisation resources from the budget and equalisation grants for decentralised functions whose amount exceeded 20% of the revenue, while the amount paid for salaries exceeded 15%.

The limit does not include resources for salaries of those employed in state administration or on projects financed abroad.