2006 to bring higher social benefits, more expensive utilities

This Sunday, New Years Day, will find many Czechs - like people around the world - making New Year's resolutions. But they won't have any say over some changes, which have been decided by Parliament and come into effect on the 1st. Understandably, people are most concerned about those which will have a direct impact on their wallets. 2006 is going to bring an increase in a number of social benefits and also a reduction in taxes for low and medium incomes. But as of January, Czechs will pay more for utilities - which is expected to bring further price increases of goods and services.

Six months ahead of next year's national elections, many Czechs will be pleased to find their pay-checks are a bit fatter. Civil servants are getting a five-percent rise and the minimum wage will increase in the coming year to 8,000 crowns (328 dollars) a month. The average pension will be just a little higher than that - 8,128 crowns, that is also after an increase. Child and housing benefits will see a slight increase and as of April, one-off maternity grants will be raised to 17,500 crowns (717 dollars), which is double the current amount.

Under a new law on income taxes, people who earn less than 20,000 crowns (820 dollars) a month will save some 4,000 crowns a year. For people with salaries below 30,000 crowns a month, taxes will be reduced by almost 3,000 crowns a year. The average monthly wage in 2006 is expected to exceed 20,000 crowns (820 dollars).

Illustrative photo: archive of Radio Prague

On the other hand, 2006 will also bring higher energy bills for Czechs. Gas prices are expected to rise by almost 5 percent on average. Heating, coal and water prices, too, will grow. But the most dramatic will be the increase in electricity costs. On average, Czech households will pay 8.9 percent more for power, the sharpest increase being in North Moravia where prices will rise by more than 13 percent.

Energy costs for companies will be higher, too. Those are expected to result in higher prices of goods and services. Analysts predict they should be balanced out by growing salaries and lower taxes. In a year's time Czechs will see whether their calculations were right.