Finance Minister Babiš ramps up coalition tensions with budget proposal

Finance Minister Andrej Babiš has presented a revised proposal for next year’s state budget which has already raised the ire of some ministers. The proposal sees around half of the government ministries working with fewer funds, among them Health, Agriculture, and Culture.

Andrej Babiš, photo: CTK

Next year seniors will see a pension rise of 105 crowns per month and state employees a pay rise of three percent a jump of about 800 crowns per month on average. But to help pay for them, cuts will be needed elsewhere the finance minister has made clear. At the same time he is seeking to trim the overall annual deficit. Under the revised budget for 2016, roughly half of the ministries will receive less. Among them is the finance ministry itself: minus 123 million crowns; the ministry of culture minus over 300 million; the Health Ministry minus 784 million crowns and Transport, with almost a billion less. So far, Agriculture Minister Marián Jurečka, who will have to count on a budget shrunken by 1.2 billion, appeared more understanding than some.

“Of course, I understand the rationale behind lowering state spending.”

The current proposal has not left all unhappy, however. Some, who fared fairly well, at least for now, include the Defence Ministry – which stands to get a bump up of some two billion crowns. Science and research will also see a budget increase. But others suggest that they will put up a fight, among them is Social Democrat Interior Minister Milan Chovanec, who says the Interior will need more than the 1.5 percent increase to 55.8 billion crowns in the proposal to be able to pay for additional personnel, including a substantial rise in police officers. The minister spoke to public broadcaster Czech TV:

Milan Chovanec, photo: Filip Jandourek

“[The current proposal] does not take into account the number of new police or firefighters or of funds being used in investment.”

There, Finance Minister Babiš made clear negotiations will be the order of the day and that he and Mr Chovanec had already agreed to meet individually. Whether Mr Babiš will be willing to budge is, at the moment, anybody’s guess, as he had made clear ministries, in his view, should be able to handle cuts. He pointed out that ministries currently have reserves of 47 billion crowns from the current fiscal period which he said they had been “unable to spend”. Rolled over, the funds could presumably ease the situation at some ministries next year.

A fight remains within the cabinet over state subsidies for the health sector: the Social democrats want to see a rise of four billion crowns, while the finance minister was against, willing to discuss only an increase of 600 million. That presents a problem. The current discord is also fertile ground for the centre-right opposition. Critics say the government wouldn’t need to scramble for missing it funds had it not scrapped fees for visiting the doctor which for years pumped in additional billions.

Bohuslav Sobotka, photo: Filip Jandourek

Most of the proposed spending cuts target Social Democrat ministers and put Babiš on collision course with Prime Minister Bohuslav Sobotka. A clash could seriously sour coalition relations with some suggesting that Mr Babiš is preparing the ground for a rift in which the government would collapse and he could make a bid for power or prompt early elections.