About Pensions, Personnel Expenses and Debt Contemplated in the General Budget of the Nation.

The Budget Project for the year 2.024 for a value of $503 billion was presented for consideration by the Congress of the Republic for its debate and subsequent approval.

On the income side, the Budget includes income tax as the main source of income with $162 billion, this is followed by value added tax with $117 billion, then credit resources made up of internal $46 billion and external $27 billion.

The above added the financial surpluses and dividends for $29 billion, among which is Ecopetrol with $15 billion and Banco de la República with $10 billion, followed by the tax on financial movements (known as 4*1000) with $15 billion.

The previous added items constitute 79% of the total income of the Budget, which is $503 billion.

On the spending side of the Budget, debt service stands out with $95 billion, transfers from the general system for $71 billion, of which $40 billion are for education, $16 billion for health, and $4 billion for healthy water. Also pensions with $70 billion and for health insurance $35 billion. Personnel expenses reach $55 billion. Also, as budget investment expenses are $98 billion (investment prepared and coordinated by the National Planning Department).

The above added items constitute 84% of the total expenses of the Budget, which are $503 billion.

With the above some observations are the following. In income, the main sources of resources are taxes followed at a distance from public credit, but the income of Ecopetrol and Banco de la República are lower, those of Ecopetrol are barely equivalent to those of 4*1.000. Taxes alone are not enough to cover income needs, which is why it is necessary to resort to internal and external credit.

In expenses, debt service is the main part of total expenses, 19%. Transfers and pensions follow in importance after health and personnel expenses.

Credit appears in both income and expenses since income is a source of resources and expenses is the payment or amortization of this loans, so only if credit decreases as a source of income will the service expense of the debt.

Some components of the Income and Expense Budget will be explained below.

TAX INCOME

The total income from taxes is $316 billion, of which, as mentioned before, income tax is $162 billion, value added tax $117 billion, the tax on financial movements $15 billion, but others are minor, such as the tax on gasoline and ACPM $2 billion, wealth tax $2 billion and Customs tax $6 billion.

PENSIONS

Pension spending is $70 billion, of which only $25 billion goes to “Colpensiones”, the rest as follows. $12 billion for oficial teachers, $14 billion for the public pension fund FOPEP, which includes $10 billion from CAJANAL and $1 billion from Telecom. Also, for military pensioners $16 billion.

DEBT SERVICE

As mentioned before, the payment of the debt is for $95 billion and is the main expense of the Budget. Within this expense corresponds to external debt $43 billion and internal debt $51 billion and also as capital amortizations $37 billion and only interest $55 billion.

PERSONNEL EXPENSES (State Payroll)

The payroll expenses reach $55 billion and correspond to 677.748 public positions, of which the main ones are those of the military forces for $24 billion corresponding to a staff of 496.344 between men and women. Of these there are 145.011 police officers, 228.215 soldiers and 19.303 Ministry of Defense civilians.

Also, from the judicial branch with 35.646 people and a payroll cost of $7.2 billion. Prosecutor's Office with 27.020 charges and a cost of $5 billion. From the Congress of the Republic there are only 886 positions at a cost of $0.7 billion. The same for the Presidency of the Republic are just 1.795 positions for a value of $0.3 billion. Of the ministries, the Ministry of Finance stands out, which contains customs and the tax office with 25.395 positions at a cost of $9.5 billion. The ministries with the least positions and cost are science and sports with 140 and 180 positions.

Additionally, as previously mentioned, with the expenses corresponding to the transfers from the nation, other personnel such as teachers and administrators of public universities are remunerated 58.517 positions and other teachers at public schools and colleges 356.248 positions and in health 46.416 for a total of 461.181 positions and a cost of $40 billion.

From the previous explanations some observations are the following.

The tax on gasoline and on wealth are very small in collection with respect to other taxes. Some analysts and experts consider that for future tax reforms, the wealth tax can be revised upwards, especially at the highest levels to create equity, since in the previous reform it fell short in the higher wealth scales. Also, the tax on financial movements known as 4*1.000 would create a hole the size of the dividends provided by Ecopetrol if it were decided to eliminate it without replacing it with other income.

In pensions, those of “Colpensiones” are only 36% of the total as explained before, so the pension reform that is currently going through Congress only affects very partially the budget expenditures for this concept. Most of the pensions that exist in the country are not modified with the reform and will continue to form part of the Expenditure Budget.

Debt service that its size limits the other expenses of the Budget or requires greater indebtedness or taxes on the income side to carry out social spending on education and health or lower this expense, also to pay the interest on that debt.

Personnel or state payroll expenses are 19% of the Budget of expenses if the personnel paid with transfers from the nation are also included. Participation that is less than other expenses such as transfers for territorial works, debt service and investment expenses. The state payroll covers, above all, the military and police forces, almost 50% of the total and with employed personnel of half a million people. Country that requires these military personnel.