The unions say their proposed measures could save the state between CZK 151.5 billion and CZK 163.5 billion. Credit: Freepik.

Czech Trade Unions Challenge Government Budget Package, Proposing Alternative Measures

The leaders of the Bohemian-Moravian Trade Union Confederation (CMKOS), an umbrella organisation of Czech trade unions, yesterday proposed a series of measures to revitalise the public finances, including the reintroduction of the electronic sales registration (EET), in reaction to the government consolidation package. The measures were presented at a press conference, during which union representatives again criticised the government’s proposals.

With the 12 measures presented, the state could save between CZK 151.5 billion and CZK 163.5 billion, confederation representatives and trade union economists told reporters.

“Our goal was to create an alternative. This is an alternative to the government program. They say there is no other solution and that people must accept what the government has served them. This is not true,” said CMKOS economist Martin Fassmann.

Prime Minister Petr Fiala (ODS) responded that he considered the trade unions’ proposals unrealistic, and that they would not achieve the required budget consolidation. The government will continue with its plans, he added.

According to CMKOS leader Josef Stredula, two-thirds of public budget revenues come from workers and pensioners, via VAT, excise tax, social insurance payments and income taxes.

“On the one hand, the rich and the entrepreneurs are forgiven, while the burden is shifted to workers,” he said.

Fiala said he had not yet had time to read all the proposals. “What I have had the opportunity to read is certainly not a realistic plan to raise the necessary funds or reduce the deficit,” he said. “These are certainly not realistic proposals (the EET renewal) and we would not consolidate public finances this way,” Fiala told reporters. He said the EET was a burden for businesses and would not bring in the tens of billions of crowns suggester.

Fiala described the government’s proposals as “the path of the future.” “We will continue this way to consolidate the budget,” he said.

CMKOS proposes to relaunch the EET, even with the planned third phase. According to the unions, it could generate CZK 20-25 billion.

The state would gain another CZK 5 billion after the abolition of the tax discount for part-time staff, and CZK 20 billion in total after the adjustment of flat expense write-offs. CZK 30 billion would come after the abolition of the loss carryback, and CZK 2 billion after lifting the tax exemption for government bonds, for instance.

Moreover, the unions say CZK 25-30 billion could be raised by introducing a real estate transfer tax and lowering the limit of inheritance and gift taxes. After the minimum wage rises to CZK 19,500, the state would gain some CZK 2 billion. Higher social insurance payments for sole traders and the self-employed could bring CZK 7.5 billion, the unions say.

They put the total amount that could be raised for the state budget at between CZK 151.5 billion and CZK 163.5 billion.

CMKOS is the largest trade union organisation in the country, incorporating 31 unions with about 270,000 members.

The unions are threatening a general strike over the government consolidation package. In mid-May, they declared a strike alert, and called on the cabinet to negotiate with them.

Trade unionists from all over the country are to decide on their next actions in Prague on 30 May, Stredula said yesterday.

The unions are criticising the government not only for the planned austerity measures themselves, but also because the cabinet did not discuss the measures with them in advance, and gave them only a few days to submit their comments on dozens of amendments in the package, until 29 May. The union leaders point out that the government bill and supporting documents contain hundreds of pages.

Czech Trade Unions Challenge Government Budget Package, Proposing Alternative Measures
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