New Czech government finalises policy statement

Deputy Prime Minister Petr Mares and Minister of Education Petra Buzkova, photo: CTK

After much debate and discussion, the new Czech coalition government of the Social Democrats, Christian Democrats and the Freedom Union finalised its policy statement over the weekend and approved it on Monday morning. The principles of the final version stay true to the Social Democrats' manifesto, focusing on the importance of the family, health care, and the increasing of state benefits. More from Dita Asiedu:

Deputy Prime Minister Petr Mares and Minister of Education Petra Buzkova, photo: CTK
Whilst issues such as EU accession, support for businesses, and the fight against corruption continue to hold a prominent place in the new policy statement, it is the development of the welfare state that has priority. In the next four years, the cabinet promises to help improve the living conditions of the family, especially those with more than one child. This would be by increasing child benefits to all families, no matter what their financial status. Support will also include a one-off lump sum to support education, with the amount depending on the level of education. According to the Minister of Labour and Social Affairs, Zdenek Skromach, the new government also intends to re-introduce family savings plans and favourable loans for newly-weds. Married couples should also be allowed to file their tax returns together, reducing their overall tax burden, especially in cases where one parent is on maternity or paternity leave. Furthermore, the policy statement hopes to increase significantly benefits for those on maternity or paternity leave (to a third of the average national salary of 25 to 35 year olds - under present conditions the increase would be by some 900 Czech crowns, or a little over 30 U.S. dollars per month).

Economists are asking the inevitable question. How the government intends to pay for it. With the state budget deficit on the rise and expenses gradually increasing is the policy statement a promise the government really can deliver? The economist, Jan Sykora, for example has reacted rather sceptically to the plan:

Minister of Defence Jaroslav Tvrdik and Minister of Labour and Social Affairs Zdenek Skromach, photo: CTK
"My main problem with the whole tone and ideology behind this programme is that it seems like there is a lot of focus on day-to-day consumption, rather than looking at investment and looking at how to increase the pile which we can possibly share with the needed. At first hand, it seems like everything looks rosy and everyone is being promised nice things but in reality one should be asking from where the government wants to fund all these ambitious social programmes."

Although that is a question that the government has not chosen to answer yet, economists hope that the solution will lie in a strong economic policy:

"I don't know where the support for businesses will be coming from. I see that there are more ministries being created, we have more deputy chairs of parliament, functions are being created and we have a really large bureaucratic apparatus on the government side. I think that the best support businesses could receive is the creation of or helping to establish business-friendly infrastructure and I see very little being done about that. That means creating business-friendly infrastructure from the tax perspective, transparent and fair environment with as little bureaucratic intervention as possible."

And Mr Sykora is not the only critic of the policy statement. For the first time since the appointment of the new government, the Civic Democratic Party will have a chance to play their role as opposition. On Tuesday, its MP's are expected to point to the financial factor as a reason to vote against the plan when it is presented before the lower house of parliament. The coalition government's slim majority of 101 in the 200 seat Chamber of Deputies, however, is expected to suffice to get a vote of confidence.