Parliament Passes 2018 Budget

Prague, Dec 19 (CTK) – The Czech parliament smoothly passed the state budget for next year today, approving the last transfers in the budget thanks to which more money will go to social services and farming and food processing.


The 2018 budget’s revenues are 1314.5 billion crowns and the expenditures are 1364.5 billion crowns.


The budget bill was supported by 140 MPs in the 200-Chamber of Deputies. The other house of parliament, the Senate, does not deal with the budget. The budget is yet to be signed by the president into law.


The budget bill was submitted by the new minority government of ANO movement’s leader Andrej Babis, however, it was prepared by the previous centre-left government of Bohuslav Sobotka (Social Democrats, CSSD).


Babis welcomed that the budget was approved, but he said his government does not fully identify with this budget.


MPs of the former government coalition of the CSSD, ANO and the Christian Democrats (KDU-CSL) voted in support of the budget, along with those elected for the Communists (KSCM) and the right-wing populist Freedom and Direct Democracy (SPD).


The right-wing Civic Democrats (ODS) and TOP 09 voted against the budget. They criticised the budget for having a 50-billion deficit at a time of economic boom, increase in mandatory expenditures and not enough investment.


The small centrist Mayors and Independents (STAN) abstained from the vote as so did the Pirates, except for one of their MPs who supported the budget.


The heads of the lower house groups of individual parties commented on the budget. Jan Bartosek (KDU-CSL) said his party supported the budget because of the increase in the budget on social services. Jan Chvojka (CSSD) said he considers the budget good and well balanced. Jan Farsky (STAN) a 50-billion deficit is irresponsible at present.


The lower house plenary session today voted on a number of proposals for financial transfers in the budget before taking the final vote on the whole budget. Most of these proposals were rejected.


Babis rejected the criticism that ANO voted against proposals that met the priorities of his new cabinet presented in the policy statement released on Monday. He said the proposals were unrealistic because there were no reserves in the budget anymore.


“The proposals for changes were unfounded and they were not serious. Everybody said money could be taken from (the servicing of) the state debt, but it is not so,” he said.


Babis also said his cabinet would have to deal with the unexpected lowering of incomes due to the scrapping of the launch of the third and fourth stages of the electronic registration of sales (EET) by the Constitutional Court.


The budget revenues would drop by six billion due to this, Babis said.


The launch of these two stages was originally planned for next year.


The lower house approved to increase spending on social services by 3.3 billion crowns, on farming and food processing by one billion crowns, and on investment in kindergartens and elementary schools by 0.3 billion crowns. In total, the transfers concerned some seven billion crowns, or about 0.5 percent of the total expenditures.


In a resolution accompanying the budget bill, the Chamber of Deputies expressed support for a future increase in spending on regional schools and universities and it recommended to the government to raise teachers’ salaries by 15 percent as of September.


The budget is based on the estimated economic growth of 3.1 percent, while last year the GDP increased by 2.4 percent. In 2018, the government wants to receive 722 billion crowns in taxes, or 35 billion more than this year. The total sum of 434 billion crowns is earmarked for the payment of pensions.


The government said the Czech economy profited from favourable internal and external conditions, but it warned against a possible further increase in the prices of real estate.New barriers in international trade caused by Brexit are considered another considerable risk. Other negative factors include the risk of a slowdown of the Chinese economy or problems of the Italian banking sector.