Government meeting, June 8, 2022 in Prague. From left, Minister of Defense Jana Černochová, Minister of Finance Zbyněk Stanjura and first from right, Prime Minister Petr Fiala.
Prague – The politicians of the government coalition will continue negotiations on the package to consolidate public finances next Tuesday. They are debating six dozen measures. They also expect to present a selected set of steps to recover finances by mid-May. After today's six-hour meeting of the so-called K15 at the Straka Academy, the chairman of the People's Party Parliamentary Club, Marek Výborný, told journalists.
“Today we did not close the negotiations. We moved somewhere. I feel good about it… All the items that are in the consolidation package are in play. There are about 60 of them. We are talking about all of them,” said Výborný. He did not want to elaborate on what government politicians had agreed upon. When he arrived at the meeting, he said that the agreement was about two-thirds of the way through. He reiterated that the deadline for introducing the package is valid until mid-May.
Prime Minister Petr Fiala and Minister of Finance Zbyněk Stanjura (both ODS) have previously stated that the consolidation package should reduce the structural deficit by about one percent of GDP, i.e. by 70 billion crowns. Last year, this deficit was 2.6 percent of GDP. According to some economists and politicians, the financial recovery should be faster.
Stanjura has previously stated that he would like to reduce state subsidies by tens of billions. He proposed the merger of two reduced VAT rates and the transfer of some items between the rates. According to available information, a number of tax exemptions could be abolished, such as a discount for a non-working spouse or the introduction of health insurance for employees.
According to Stanjura, the measures under discussion are based on the opinions of individual coalition parties and the recommendations of the National Economic Council of the Government (NERV). She proposed a set of 12 steps on the expenditure side and 17 on the income side for a total of 200 billion crowns. She recommended the return of the income tax rate to the level before the abolition of the super-gross wage, the abolition of state support for building savings and some tax exemptions, charging for universities, reducing the number of police officers, limiting subsidies in agriculture or shortening parental leave. Stanjura has repeatedly said that most austerity measures should be on the spending side and the government has pledged not to increase the overall tax burden.