Former finance minister Miroslav Kalousek wants to make history and go into the autumn general election as a responsible politician. At a time when the hole in the state coffers is very deep, he plans to balance the budget. But he says this will not be possible before 2016.
Minister Eduard Janota wants to solve the deficit through cuts and higher taxes. He is proposing, for instance, a higher VAT. Do you agree?
Taxes should not be increased. It is much more important to adjust expenses, which are not, right now, appropriate given the conditions. On the other hand, the correct answer is not obvious. So if we had to agree on something politically, it could be indirect taxes. But only under the condition that it would be in a proportion of one to three. That means for any increases in taxes, there would have to be at least three instances of savings on the expenses side.
You say that savings are the most important right now. Where should we make cuts?
If we want to make a real difference in the budget, we won’t be able to do it without launching pension reforms, health insurance reforms and social subsidies reforms. And we’ll need to do something with the costly, and difficult-to-justify government subsidies for building savings.
How do you want to execute these reforms, so that they would be socially responsible?
The reforms need to be made as soon as possible. The later they come, the more painful they will be. I think it is essential – and here I am maybe undermining our platform a little bit – to institute a plan to consolidate public budget at the legal level. The plan clearly states that, by 2016, we will have a balanced public budget.
That sounds nice. But is it even possible, especially when the deficit next year will reach CZK 200 billion?
It is possible. If we realise that we are living beyond our means right now. If we continue in this, we will have no choice but to balance the budget. Because no one would give us any loans anymore.
