strona 126 4209ea3c0c45e budzet ang2005

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contents 2 Introduction 3-4 Basic macroeconomic indicators 2005 5 Total state defence effort 2005 6 Additional financial sources 7 Cost categories breakdown over the years 2004 - 2005 8 National defence priority tasks for the year 2005 9 Structure of MoND budget 2005 by main services 10 Section 752 National defence 11 Structure of MoND budget by main services 12 Personnel in 2005 13 Main personnel figures over the years 2004 - 2005 14 Military personnel by chapters in National defence section 15 Pensions 2005 16 Equipment &infrastructure expenditures within MoND budget over the years 2001 - 2005 17 Poland’s budget expenditures compared to NATO average 18-19 Recapitulation 20


This publication provides main information on the budget expenditures of Ministry of Defence in the year of 2005 and their breakdown according to various criteria and specific comparisons. Information covered in this presentation include, mainly macroeconomic data based on MoND budget, other defence expenditures allocated by other state budget holders and some comparisons to NATO defence expenditures average. In accordance with the 2005 Budget Act, ceiling of defence expenditures was established according to formula 1.95% of GDP 2004 and amounts MPLN 17,240, of each MPLN 17,192.3 is allocated to Ministry of Defence (Section 29 of the state budget) and MPLN 47.7 to the other parts of the state budget. Additionally, for the implementation of the multirole aircraft procurement program MPLN 439.2 was placed within designated reserves of the state budget (0.05% of the GDP). Therefore, defence financial means of the state budget together (defence expenditures plus aircraft program) amount MPLN 17,679.2 - as is 2 % of predicted GDP 2004 (BPLN 884). So, defence expenditures in comparison to the year 2004, observe the nominal growth by 8% and 5% in real term. In spite of significant increase Polish defence expenditure are still well below NATO average (per capita - triple and per soldier - twice). Nevertheless the above mentioned expenditures, MoND expects to strengthen modernisation process of armed forces by collecting some off budget resources: Modernisation Fund of Armed Forces - 96,5 MPLN, Revenues from privatisation of defence sector - 13.2 MPLN, Minister of Science and Information Technology allocations to defence research and development projects (estimation) - 148,1 MPLN 3


Polish defence potential is also backed up by foreign funds as following: NATO Security Investment Program (NSIP) - 279.3 mln PLN, Foreign Military Financing (FMF) - 260,0 mln PLN, International Military Education and Training (IMET) - 8.0 mln PLN Looking at a perspective of a few years it would be known easily, that defence expenditures increase successively with quite significant change to a breakdown to basic costs categories. For instance a share of capital investment (equipment and armament and construction) to the MoND budget as a whole was 9.5% in 2001, 12.7% in 2002, 13.6% in 2003, 16.2% in 2004 and finally 19.4% in 2005 (a plan). To get so significant increase to capital investment MoND had to implement many painful decisions regarding directly military personnel (reduction in manpower and closing of military basis). Except many positive trends in the budget, we can not unequivocally say, that all the needs of the armed forces will be accomplished in the year 2005. In spite of the fact that petrol expenditures are raised by 11% in 2005 in comparison to the year 2004, petrol quantity procurement of armed forces will depend strongly on further stabilisation on the world oil market. Despite real defence expenditures increase in 2005 training levels still differ among troops - similar to NATO standards in units of high readiness forces and lower in the others. Summing up, we can ascertain that the year 2005 will be a period of pro evolutionary budget, which reflects positive trends and improvements in financing of defence tasks and missions. 4


basic macroeconomic indicators 2005 5


total state defence effort 2005 r. Defence expenditures - MPLN 17,240.0 (1.95% of GDP 2004) Designated reserve - MPLN 439.2 „aircraft program” 6 additional off budget sources - MPLN 805.1 state - MPLN 257.8 foreign - MPLN 547.3 within: - MoND expenditures- section 29 National Defence - MPLN 17,192.3 - other ministries defence expenditures - MPLN 47.7 Total - MPLN 17,679.2 Average annual increase - 5%


additional financing sources Armed Forces Modernization Fund - MPLN 96.5 Privatisation of defence sector - MPLN 13.2 Defence research in Ministry of Scientific Research and Information Technology (estimate) - MPLN 148.1 state - MPLN 257.8 foreign programs - MPLN 547.3 NSIP - MPLN 279.3 FMF - MPLN 260.0 IMET - MPLN 8.0 7


Year 2005 8 Year 2004 cost categories breakdown over the years 2004 -2005


national defence priority tasks for the year 2005 2. Budget allocation for military peace missions. 3. Providing duty conditions for new professional private corps. 1. Technical modernization : New C3 equipment (command, control and communication), Adjustment of reconnaissance and electronic warfare systems to NATO standards Improvement on manoeuvre abilities and firepower of high readiness forces units through implementation of wheeled transporters (ROSOMAK) and antitank missiles (SPIKE) Improvement on abilities of anti aircraft systems Improvement on mobility and transport ability of the army Continuation of „multitask aircraft program”. 9


Section 750 Public administration MPLN 156.0 (0.91%) Section 710 Public services (Military Property Agency) MPLN 2.1 (0.01%) Section 700 Housing (Military Lodging Agency) MPLN 326.9 (1.90%) structure of MoND budget in sections Part 29 National defence MPLN 17,192.3 NATIONAL DEFENCE MPLN 12,107.3 70.42% Section 752 Section 753 Social security schemes (pensions) MPLN 4,177.6 (24.30%) Section 755 Administration of justice and Public Prosecutor's office MPLN 49.9 (0.29%) Section 803 Higher education MPLN 250.7 (1.46%) Section 851 Health care MPLN 90.8 (0.53%) Section 852 Social welfare MPLN 12.3 (0.07%) National heritage and culture Section 921 MPLN 18.7 (0.11%) 10


section 752 National defence NATIONAL DEFENCE MPLN 12,107.3 Section 752 Chapter 75201 LAND FORCES MPLN 6,097.6 (50.36%) Chapter 75202 AIR FORCES MPLN 2,500.5 (20.65%) Chapter 75203 NAVY MPLN 1,097.7 (9.07%) Chapter 75204 Central support MPLN 505.6 (4.18%) Chapter 75205 Liaison offices for NATO & military personnel in NATO MPLN 136.5 (1.13%) Chapter 75206 Military Intelligence Services MPLN 170.6 (1.41%) Chapter 75207 Military Police MPLN 213.3 (1.76%) Chapter 75208 Roman Catholic Chaplaincy MPLN 12.4 (0.1%) Chapter 75209 Orthodox Chaplaincy MPLN 1.8 (0.02%) Chapter 75210 Evangelical Chaplaincy MPLN 1,4 (0.01%) Chapter 75211 Other military units MPLN 1,063.0 (8.78%) Chapter 75216 Military peace missions MPLN 306.9 (2.54%) 11


structure of MoND budget 2005 by main services (in thousand PLN) 12 Comment: Equipment and infrastructure figure doesn’t enclose funds for multirole aircraft program


personnel in 2005 Personnel expenditures - MPLN 4,922.4 – nominal increase by 0,2% (incorporating salary rise by 3%) Average salaries (monthly): Professional soldier - PLN 2,722 Civilian personnel: Civil servant - PLN 2,011 Other personnel - PLN 1,727 13


14 *) at the and of 2005 the number of privates will achieve 7.625 *) personnel figures over the years 2004 - 2005


15 military personnel by chapters in National defence section


pensions 2005 Pension expenditures - MPLN 4,017 Number of pensioners - 153,200 (year average) Annual pensioner indicator - 104.2% (increase by 4.2%) Average pension - PLN 2,112 No pension rise 16


equipment & infrastructure expenditures within MoND budget over the years 2001 - 2005 17 - with “aircraft program”expenditures” - without “aircraft program”expenditures”


Poland’s budget expenditures compared to NATO average (per capita in USD) 18 current prices Source: Based on NATO’s statistical tables 2004, except Poland 2005 which was prepared according to budget allocation and exchange rate used during budget planning phase.


19 Source: Based on NATO’s statistical tables 2004, except Poland 2005 which was prepared according to budget allocation and exchange rate used during budget planning phase. Poland’s budget expenditures compared to NATO average (per soldier in thousand USD) current prices


The MoND budget for 2005 provides conditions to: 20 recapitulation

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