Czech Parliament Increases 2022 State Budget Deficit To CZK 375 Billion
The budget deficit includes an extra CZK 38 billion for households and firms to fight rising energy prices. Photo credit: psp.cz.
Prague, Oct 18 (CTK) – The lower house of Czech parliament yesterday approved an increase in the 2022 state budget deficit to CZK 375 billion, which is CZK 45 billion more than the increase proposed by the government and CZK 95 billion more than the deficit of the original budget passed in February.
Government MPs proposed to give CZK 38 billion more to households and firms to fight rising energy prices, and CZK 7 billion for social affairs such as health insurance, unemployment benefits and other welfare. The first proposal was made by lower house economic committee head Ivan Adamec (ODS) and MP Tomas Muller (STAN), the second by Labor Minister Marian Jurecka (KDU-CSL).
Finance Minister Zbynek Stanjura (ODS) said he did not expect that the whole CZK 38 billion to tackle high energy prices would be spent this year, but it was important to include in the budget so that the government can announce programs in support of small businesses.
Prime Minister Petr Fiala (ODS) said he considered the increased budget justified. He said it was due to the impact of the war in Ukraine, which began after the budget was prepared, and the growing costs of living caused by high inflation and high energy prices.
Fiala said he believed budget revenues would be higher as a result of more money collected in taxes.
All government MPs present voted in support of the budget amendment, while the opposition parties ANO and Freedom and Direct Democracy (SPD) voted against it. However, the opposition supported both proposals that increased the budget deficit.
The opposition submitted several proposals for financial transfers in the budget, totalling CZK 63 billion, but none of them were passed.
The Chamber of Deputies removed CZK 30 million from the budget of the Presidential Office, from the money for forest management. These finances will be spent on anti-drug policies and support for youth organisations. This is a reaction to a sentence imposed by the courts Lany presidential forest manager Milos Balak for the manipulation of public orders, and to the pardon that President Milos Zeman granted to Balak.
The increased expenditures include CZK 900 million for new police vehicles and CZK 300 million for firefighters for new vehicles and equipment.
Former finance minister Alena Schillerova (ANO) said the government had given up any effort at savings in its budget amendment. She said the budget spending planned for this year will exceed CZK 2,000 billion, and accused the government of not being able to allocate these expenses effectively.
“In the current situation when the whole of Europe is facing the war in Ukraine and its direct impacts also on our country, I can see no other solution,” said lower house budget committee head Josef Bernard (STAN) in a press release. He said a structural deficit would be on the agenda in the following years.
The total budget expenditures will increase by CZK 160 billion. For example, an additional CZK 29 billion will be spent on welfare and a further CZK 4.4 billion on tackling the impacts of the coronavirus pandemic.
The government expects budget revenues to be CZK 65 billion higher than originally projected. The state is forecast to receive CZK 25 billion more in value added tax, about CZK 10 billion more in the income tax from individuals, and CZK 9 billion more in corporate tax.