Government approves public finance reform bill
The coalition government of Mirek Topolanek on Wednesday unanimously approved the first stage of broad public finance reforms. The plan brings changes to the tax and welfare systems and also introduces new healthcare fees. Now it remains for the government to push the proposal through the lower house. The coalition cabinet is in for some tough negotiations this summer as the opposition is firmly against the reforms and the government cannot even rely on the support of all coalition MPs.
"We have solved all problems and disagreements. The whole file is about 15 centimetres thick. There were no disagreements as to the healthcare area submitted by Health Minister Tomas Julinek or the social system reform submitted by Labour Minister Petr Necas. Those had been approved earlier."
The government also accepted the Greens' proposal that households using natural gas for heating be exempted from the environment tax. The reform plan abolishes sickness benefits in the first three days of an illness, gives incentives to mothers who opt for a shorter maternity leave, and also proposes a gradual decrease of the corporate tax.
"What is included in the government's package is not a tax reform. Moreover it contradicts an important part of the economic programme of the Civic Democrats. I have offered a solution, a compromise, a discussion and now it is up to the government and mainly its Civic Democrat members when, where and with whom such debate will take place. If there is no compromise and the tax part stays the same, my position will be the same: no compromise, no agreement."
Trade unions have already announced they will stage protests against the government plan in June. It looks like the cabinet of Mirek Topolanek could now be in for a hot summer as it had pledged to step down if it fails to push the reforms through.