Chamber of Deputies Approves CZK50 Billion Deficit for 2018

Prague, Dec 5 (CTK) – The Czech Chamber of Deputies approved the 2018 state budget bill in first reading today, supporting the budget’s basic parameters or revenues, expenditures and a deficit projected at 50 billion crowns.


The deficit is 10 billion crowns lower than that projected for 2017.


The approved budget revenues are 1,314.5 billion crowns, the expenditures are 1,364.5 billion crowns.


The deficit is to be covered mainly by the issuance of state bonds.


In the 200-seat lower house, the budget was supported by 116 deputies from the outgoing government coalition of the Social Democrats (CSSD), the ANO movement and the Christian Democrats (KDU-CSL), and from the Freedom and Direct Democracy Movement (SPD).


The Pirates and the Communists (KSCM) abstained from the vote, while the Civic Democrats (ODS), TOP 09 and the Mayors and Independents movement (STAN) voted against the bill.


The budget’s basic parameters can no longer be changed now and money can only be transferred between individual budget chapters in the second reading.


The final third reading is scheduled for December 19.


The lawmakers rejected today TOP 09’s proposal that the bill be returned to the government for reworking. It was supported by only nine deputies from TOP 09 and STAN.


In a debate preceding the vote, outgoing Finance Minister Ivan Pilny (ANO) said the original draft budget gap was 100 billion crowns higher but he managed to reduce it to 50 billion.


He said he does not share the Pirates’ fears of an increase in the state debt.


In reaction to MP Jan Farsky (STAN), Pilny admitted that the Czech Republic is rather unprepared for the moment when the EU subsidies will shrink.


The draft budget was mainly criticised by the rightist parties.


ODS chairman Petr Fiala called it “a gallery of curiosities and absurdities”.


Former finance minister Miroslav Kalousek (TOP 09) criticised it for what he called irresponsible raising of spending on consumption, instead of investments.


CSSD deputies’ group chairman Jan Chvojka said the CSSD considers the budget bill good, balanced and containing some priorities the CSSD views as important.


KDU-CSL head Pavel Belobradek said the budget was a result of a coalition compromise and that he believed it will finally end better than what has been projected now.


The draft budget is based on an estimated 3.1 percent growth of GDP, compared with the GDP growth of 2.4 percent in 2016.


The government said, in connection with the budget bill, that Czech economy benefits from favourable domestic as well as external conditions. A higher growth of the European and world economies and a related stronger demand for Czech exports cannot be ruled out, the government said.


On the other hand, it warned against risks such as a further steep increase in real estate prices.


The government plans tax revenues to reach 722 billion crowns next year, a 35-billion increase compared with the tax revenues projected for 2017.


Over 434 billion crowns is to go to pensions.


The budget bill will now be discussed by lower house committees that will deal with its individual chapters.


On December 13, President Milos Zeman plans to appoint a minority government of ANO leader Andrej Babis, who helped prepare the 2018 draft budget in his previous capacity of finance minister until May 2017.