The package faces its third and final reading in the lower house, which is expected to vote on it next week. Credit: Freepik.

Czech Government Will Not Draft Further Austerity Package, Says Finance Minister

The Czech government is not going to prepare another package to balance the public budget, Finance Minister Zbynek Stanjura (ODS) said after a meeting with President Petr Pavel yesterday.

Stanjura also said that one of his pre-election promises was that taxes would be changed only once per election term.

He added that the president had not said whether he would sign the government’s consolidation package, currently under discussion in the Chamber of Deputies. However, he said the package met the head of the state’s demands.

Pavel wrote on Twitter after the meeting that he welcomed the government’s efforts to consolidate the public finances. The president said he considered the draft state budget for next year realistic and balanced.

The package, which mainly contains tax adjustments, faces its final third reading in the lower house, which is expected to vote on it next week.

According to the Finance Ministry, the measures in the package, together with cuts in state subsidies, will improve the state budget balance by around CZK 97 billion next year. However, due to the growth in other spending, the budget deficit will not be reduced by this entire amount.

“I informed the president how the legislative process is going and what has changed since the beginning of May,” Stanjura said.

Stanjura, like Transport Minister Martin Kupka (ODS) a day earlier, said it was the last such package of this government. “We are not planning another big legislative change. We said in the election campaign already that we wanted to change taxes once in a term. We will not prepare another package,” the Finance Minister said.

Stanjura also noted that from the president’s point of view, the package had to meet two conditions: reducing the growth of state debt and being socially bearable.

“I firmly believe that the president will take into account the fulfilment of these conditions. But my ambition today was not to ask the president how he would proceed. There will still be a vote in the Chamber of Deputies and the Senate,” he said .

Stanjura also briefly informed Pavel on the draft state budget for next year, which the government approved last week and sent to the lower house. “I wanted to present to him the basic principles, the course of negotiations and where the government sees its priorities,” Stanjura said. He added that he considered it correct for the president to get acquainted with the budget before MPs start debating it.

“I welcome the government’s consolidation efforts and overall, I consider the draft budget realistic and balanced,” Pavel wrote on Twitter. “Nevertheless, I asked the minister about a few problematic points on which I wanted to know more. Those are, for example, the uncertain estimation of the windfall tax revenues, the unclear funding of the State Transport Infrastructure Fund and related transparency of the balance of the entire government sector, and the unclear basis for the CZK 19 billion increase in expected tax revenues.”

He appreciated that Stanjura wanted to clarify all the issues before the budget was approved in the Chamber of Deputies.

Czech Government Will Not Draft Further Austerity Package, Says Finance Minister
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