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On 30 December 2014, during his visit to the talk show, Choice,

the leader of the United National Movement, Davit Bakradze, stated: “The government increased its spending by GEL 350 million in 2015. I would like to say to our public that it will cost them GEL 350 million more to run the government in 2015 than it did in 2012.”

FactCheck

took interest in this statement and verified its accuracy.

Government spending is the cost of service provided by the government annually. This includes the remuneration of public servants as well as the costs of performed services. Government spending appears in the remuneration and goods and services clauses of the state budget.

A total of GEL 1,049 million was allocated for remuneration in the 2012 state budget whilst it will reach GEL 1,407 million in 2015. Hence, according to the current state budget, the aforementioned clause allocated GEL 358 million (34%) more than it did in 2012. The goods and services clause allocated GEL 1,061 million in 2012 whilst it will decrease to GEL 964 million in 2015. Hence, the money allocated by this clause has been decreased by GEL 97 million (9%) in 2015 as compared to 2012.

As for the overall spending of the government, it increased by GEL 261 million (12%) in 2015 as compared to 2012, reaching GEL 2,372 million.

We took interest in the trends of increase of government spending in previous years.

Table 1:

 Government Spending According to the State Budget (from 2010 to 2015)

Year

Remuneration

Goods and Services

Overall Government Spending

GEL Million

Percentage (%) as Compared to the Previous Year

GEL Million

Percentage (%) as Compared to the Previous Year

GEL Million

Percentage (%) as Compared to the Previous Year

2010

993

5%

882

-1.7%

1,875

1.9%

2011

1,012

2%

989

12.2%

2,001

6.7%

2012

1,049

4%

1,061

7.3%

2,111

5.5%

2013

1,188

13%

766

-27.8%

1,953

-7.5%

2014

1,318

11%

854

11.5%

2,172

11%

2015

1,408

7%

964

12.9%

2,372

9%

Source: Ministry of Finance of Georgia

At the table makes clear, government spending decreased only in 2013 (it would have decreased only by 3% had the state budget been fully implemented). The biggest growth in percentage, however, is recorded in 2014 and 2015. Unlike the overall government spending, remuneration increased every year. The biggest growth in percentage (13%) was recorded in 2013. It increased by 7% in 2015 as compared to the previous year.

We focused upon the government structures which received significantly more funding as compared to 2012; namely, Ministry of Defence of Georgia – GEL 96.5 million, Ministry of Internal Affairs of Georgia – GEL 62.7 million, Ministry of Culture of Georgia – GEL 50.2 million, Ministry of Economy and Sustainable Development of Georgia – GEL 28.5 million, Common Courts – GEL 19 million and so on. The growth of remuneration in the Ministry of Culture of Georgia was due to the transfer of persons employed in the facilities controlled by the Ministry under the Ministry’s clause in the state budget. For this reason, the remuneration fund of the Ministry of Culture increased by GEL 49 million in 2015 as compared to 2014. In addition, the growth of remuneration in the Ministry of Internal Affairs of Georgia was mainly due to the transfer of the Fire and Rescue Services to the Ministry. Fire and Rescue Services were funded by GEL 20 million which, consequently, were transferred to the Ministry of Internal Affairs. The aforementioned changes increased the remuneration clause of the 2015 state budget by GEL 69 million in total.

Chart 1:

Growth of Remuneration in the 2015 State Budget (GEL Million)

image001

Source: 2015 State Budget

It should be pointed out, however, that the number of people employed in the public sector does not grow proportionately to the growth of the remuneration fund in the budget. Despite the fact that the number of public servants did indeed increase in 2013, 2014 and 2015, the growth in percentage is much lower than that of the remuneration funds.

Table 2:

Change in Numbers of Public Servants (from 2012 to 2015)

Year Number of Employees Change in Percentage (%)
2012 102,976
2013 109,685 6%
2014 111,337 2%
2015 116,442 5%
Source: Ministry of Finance of Georgia

It should also be noted that the growth of the number of people employed in the public sector was mainly due to the increase of the number of employees of the Ministry of Internal Affairs of Georgia and the Ministry of Culture of Georgia. In the case of the Ministry of Culture, this was due to the transfer of those employed in the agencies subordinate to the Ministry’s clause in the state budget. As for the Ministry of Internal Affairs, the growth resulted from incorporating the Fire and Rescue Services into the structure of the Ministry in 2015.

In order to check whether or not government spending increased in the regions as well we looked into the overall budget of Georgia (including the State Budget of Georgia, State Budgets of the Autonomous Republics of Abkhazia and Ajara and the local government budgets). According to the 2012 overall budget of Georgia, government spending amounted to GEL 2,500 million, increasing by 6% as compared to the previous year. Government spending decreased by 3% in 2013. It increased again by 7% in 2014 and 9% in 2015. Based upon these data we can say that the government spending increased with more or less similar levels in both the central government as well as in the regions.

The expected government spending for 2015 constitutes 13% of the GDP which clearly reflects the amount of money spent upon running the government every year.

Table 3: Share of Government Spending in GDP

Year

Percentage (%)

2010

11%

2011

12%

2012

12%

2013

14%

2014

13%

2015

13%

Source: Ministry of Finance of Georgia

Despite the fact that government spending has nominally increased, the “size of the government” is usually measured by the share of its spending in the GDP and the growth of this share. As the chart makes clear, the share of government spending is increasing with regard to the GDP as well.

Conclusion

Government spending (the remuneration and goods and services clauses of the state budget) increased by GEL 261 million in 2015 as compared to 2012. For an impartial assessment, we should subtract GEL 69 million from this number (due to the aforementioned cases in the Ministry of Internal Affairs and the Ministry of Culture) which were not allocated from the state budget. Hence, government spending increased by GEL 192 million as compared to 2012.

In his conversation with FactCheck,

Davit Bakradze pointed out that in his statement he talked about the growth of remuneration only; however, as stated earlier, government spending includes the goods and services as well as the remuneration clauses. Mr Bakradze does indeed state an almost exact number (the remuneration clause allocated GEL 358 million more) but GEL 69 million from this is an addition which was due to the changes in the budgets of the Ministries. Hence, the actual growth of remuneration in 2015 as compared to 2012 was GEL 289 million.

Davit Bakradze is correct when talking about the significant increase in government spending; however, he is not entirely accurate when defining government spending and providing the respective numbers. In spite of this, given the context of the statement, FactCheck concludes that Davit Bakradze’s statement is MOSTLY TRUE.