Alena Schillerova


Finance Ministers Budget Contains Kc40 billion Deficit

Alena Schillerova, Andrej Babiš, ANO

Prague, Aug 26 (CTK) – Finance Minister Alena Schillerova (for ANO) will submit a draft Czech state budget for 2019 with a lower deficit of 40 billion crowns instead of the planned 50 billion, she told public Czech TV in the Questions of Vaclav Moravec debate today.


The government has already approved the higher deficit for next year.


A lower deficit is possible thanks to the expected rise in salaries, and consequently, also in taxes and insurance payments, she said.


On the basis of a new macroeconomic prognosis, the state expects a pressure on the pay rise as the economy output is rising, too, Schillerova said.


As the tax and insurance payments make up at least a half of the budget revenues, higher revenues and thereby also a lower deficit can be expected, she pointed out.


Schillerova is also planning to readjust the medium-term expenditure framework so that the budget deficit would also stay at 40 billion crowns in 2020-21. However, she is not planning a more marked decrease of the deficit due to the expected slowdown of the economy, she said.


Czech Foreign Affairs Minister Jan Hamacek (Social Democrats, CSSD) commented the proposal on Facebook, saying it was a good idea, but it should not be at the expense of salaries in the public sector, and stressing the CSSD’s support for the CMKOS trade union confederation’s demand of a 10-percent salary rise in the sphere, which is opposed by ANO. Hamacek wants the cabinet to discuss the issue on Wednesday.


National Budget Council head National Eva Zamrazilova said she agreed that this deficit proposal was the lowest possible due to the demands of the ministries on heritage restoration, healthcare, education and pensions, which were justified. However, she stressed that the budget should be balanced at the current time of economic growth. She criticised the expenditures on discounts on public transportation for students and pensioners and the plan to lower the VAT on beer.


MEP Ludek Niedermayer (opposition right-wing TOP 09) criticised the proposed budget in the TV debate today. He said the proposed deficit decrease was not the maximum possible at the times of the economic growth.


“As if in the budget planning, the budget development and its impact on the years to come did not matter, but only that what it does with the present voter preferences,” he said.


The Civic Democrats (ODS) also criticise the proposal. The only acceptable deficit was zero, and both latest two cabinets led by ANO wasted the time of economic prosperity suitable for a restructuring and recovery of the public finance, ODS MP Jan Skopecek said.


The government presented its draft budget for 2019 with a 50-billion-crown deficit in June.


The Finance Ministry then projected the total budget revenues of 1,432 billion crowns, which is 117 billion more compared to the 2018 budget, and the expenditures of 1,482 billion crowns.


Schillerova will put the exact parameters of the current draft of the 2019 state budget with a lower deficit in the government information system by the end of August.