Trade unions criticize planned reform of public finances

The Czech governing coalition on Sunday confirmed its fiscal reform proposal from last week, despite angry protests by trade unions. The reform envisages higher excise and VAT tax, lower corporate income tax, slower growth in state employees' salaries and lower social payments. Earlier today Daniela Lazarova spoke with Zdenek Malek, Vice-President of the Czech and Moravian Confederation of Trade Unions to find out what the trade unions' current position is:

Trade unions criticize planned reform of public finances

Czech government and President of the Czech and Moravian Confederation of Trade Unions, Milan Stech (in left), photo: CTK

"We do agree that reform is necessary, but we do not agree with a reform consisting only of measures that are directed at the expenditure side and do not touch on the income side. We do not think that these measures should touch only the most socially vulnerable groups and employees in the country - I mean pensioners, families with children and employees and such. We think that it should also touch those people who for example are not paying taxes. There are self employed people whose taxes are different from employees taxes which means that they do not contribute in the same manner to the health insurance system etc. etc. which all together creates a gap of maybe some 100 billion crowns. This must be changed because otherwise the burden will lie once again on the employees."

You would also like to see a millionaires' tax introduced, I believe?

"Not necessarily, I did not refer to self-employed people. I meant small firms not employing anybody or employing say five, ten people. I am not suggesting they are millionaires. Certainly they are not. But they must be taxed properly and they are not. "

You say it is too early to say at this point whether there will be demonstrations and protests but it seems that trade unions in Moravia -where the unemployment situation is particularly bad - are getting very angry indeed...

"You are right. On May 22nd we are going to Ostrava where there is going to be a mass demonstration against unemployment and certainly this will be the first test. "

Do you still hope to reach agreement with the government?

"I really can't say. This is a coalition of three different parties and we understand that the negotiations among themselves are rather difficult in view of maintaining the fragile equilibrium they achieved after the elections. I do no think that our arguments do not carry weight. I think that the main problem is how one party of the coalition can sell them to the other two parties and vice versa."