INESS, Bratislava 7.3.2012

We added to our The State Waste database the whole proceeded year 2011. Database now consists of 824 documented cases of waste, clientelism and lawsuits brought up by the printed media since the year 2007. The total sum of revealed inefficient use of public funds in the year 2011 in the categories Waste and Lawsuits reached EUR 553.5 mil. It is not only the waste during this period of time but also the one which was present in media or was closed in the year 2011. The total sum of inefficient use of public funds during the whole project reached already EUR 2.064 bln.in these two categories.

Findings of the project The State Waste gain even more importance given the announced plans to increase the taxes, reportedly supported by the majority of parties seeking the support of the voters in the early parliamentary elections. It turns out that revenue contributed by increased taxes to the reduction of the government deficit is lower than the value of waste in the public administration. For example if there was progressive personal income taxation (expected additional revenue EUR 65 mil.), progressive taxation of corporate income tax (EUR 64 mil.), higher bank tax (EUR 189 mil.) and dividend tax for individuals (EUR 20 mil.), the annual sum of increased revenue from these changes would constitute only 60% resources that were registered in The State Waste last year. Taking into account that our database contains only publicized cases there is a reason to assume that a sum of EUR 2.064 bln. in these 5 years is just a tip of an iceberg of the waste of public resources.

There is certainly place for increasing efficiency in use of the public resources.

Category “Waste”

The total volume of the monitored category waste, which we based on the cases recorded in media, reached in the last year EUR 446.7 mil. For comparison, it is almost the same amount of resources as used in 2011 for the secondary education and eighteen times the budget of the Slovak Academy of Sciences.

Sum EUR 446.7 mil. includes for example so-called golden parachutes – astronomic compensations for a few weeks or months in office, platinum sieves scandal and numerous examples of wasting and ineffective use of our money selling and purchasing goods and services for the state. The average annual volume of waste since the beginning of the project in 2007 reached EUR 374.4 mil.

Category “Clientelism”

Sum of the cases in the category clientelism recorded in the year 2011 reached EUR 102.2 mil., which is below annual average of EUR 130 mil. from the beginning of the project. This sum is constituted by cases such as overpriced tailor-made purchases, party nominations but also cases of clientelism at the level of municipalities and local governments.

Category “Lawsuits”

Apart from clientelism and waste the project also monitors lawsuits in public cases, which cost us a lot of money. In 2011 cases presented in the media amounted to EUR 106.8 mil. Cases of the concluded lawsuits, presented in the media concerning last 5 years, gave a sum of EUR 192.1 mil.

Waste avoided through the intervention of the media

Another category is the cases which were corrected or stopped after Slovak media paid attention to them. The total volume of clientelism and waste, which was prevented thanks to the work of media in the year 2011 reached EUR 9.06 mil., since the beginning of the project the total sum is EUR 368.6 mil.

Methodology for creating database can be found here (in Slovak)