Prague, Sept 9 (CTK) – The Czech cabinet, which discussed the 2016 budget bill at its meeting in the presence of President Milos Zeman Wednesday, interrupted the debate and adjourned it until September 23, when its approval is expected, Prime Minister Bohuslav Sobotka (Social Democrats, CSSD) has told journalists.
The Finance Ministry, headed by Andrej Babis (ANO), submitted a draft 2016 state budget with a deficit of 70 billion crowns.
“The 2016 budget is to enhance the [economic] growth and a reduction of the unemployment rate,” said Sobotka.
Before September 23, the coalition council, comprised of the three government parties’ leaders, will meet to discuss some additional changes to the draft budget that particular ministers proposed Wednesday, Sobotka said.
The ministers demand their budgets to be raised by ten billion crowns in total, Babis told reporters Wednesday.
He added that since the beginning of the budget talks he had allocated 34.6 billion crowns more than the original proposal to particular sectors.
This was possible thanks to a reduction in the service of the state debt agenda, an unemployment decrease, an increase in the tax revenues outlook, Babis said, adding that reserves can be found in the revenues of state firms only.
Babis also criticised the ministries for an immense rise in their staffing.
According to CTK’s information, Zeman repeated to the ministers that he supports the 70-billion-crown budget gap but believes that it should not be bigger.
He also emphasised the importance of investments and an effective drawing of EU subsidies, and said that primary attention must be paid to security, i.e the budgets of the Interior and Defence Ministries, Interior Minister Milan Chovanec (CSSD) told journalists during the cabinet meeting.
The debate focused on investment incentives and the construction of roads and motorways, and finally also security issues, including the tackling of the migration crisis faced by Europe, Chovanec said.
The cabinet must approve the budget and send it to the Chamber of Deputies by the end of September.
Compared with its preliminary draft budget from June, the Finance Ministry has raised both the state budget expenditures and revenues proposed for 2016.
The expenditures have been raised by about 16 billion crowns. The budgets of most offices have been increased.
The latest proposal projects the 2016 state expenditures at 1,249 billion crowns and revenues at 1,179 billion.
Former finance minister Miroslav Kalousek, deputy chairman of the right-wing opposition TOP 09, said the draft state budget is “gluttonous, based on redistribution and socialist.”
He said the deficit is unjustifiable. “When does this political establishment want to attain balanced budgets if it is not capable of it even at a time of exceptional prosperity?” Kalousek asked when meeting journalists.
“It amounts to economic amateurism to submit a budget with a 70-billion gap in a period of a sharp economic growth. Once again, Prime Minister [Bohuslav] Sobotka (CSSD) has failed to draw a lesson from the mistakes he repeatedly made when he was finance minister (2002-2006),” opposition Civic Democrat (ODS) chairman Petr Fiala said Wednesday.
“Once again, the socialist government is squandering the money that it has not created but that has been created by citizens,” Fiala said.
He also criticised the government’s plan, reflected in the draft budget, to recruit 12,000 new civil servants.
Apart from Sobotka’s CSSD, the government consists of Babis’s ANO movement and of the Christian Democratic Union (KDU-CSL).
According to the draft budget for 2016 and the outlook for the following years, the budget deficit will not exceed 3 percent of GDP, which is the maximum level required for the introduction of the euro.
In 2016, the budget deficit is to be 1.2 percent of GDP, and in 2017 and 2018 it is to be 0.8 and 0.6 percent, respectively.
The 2015 state budget is projected with a deficit of 100 billion crowns.
results 2014 (in billions of crowns) approved 2015 budget (in billions of crowns) 2016 draft budget (in billions of crowns)
State budget revenues 1,133.8 1,118.5 1,179.3
State budget expenditures 1,211.6 1,218.5 1,249.3
Budget deficit – 77.8 – 100 – 70
Source: Finance Ministry
