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State mainly uses taxes, welfare to support families, study shows

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Prague, June 7 (CTK) – The Czech state uses mainly tax reliefs and welfare benefits to support families, while kindergartens and other services are underfinanced and with an insufficient capacity, according to a study released by the Institute for Democracy and Economic Analysis (IDEA) of the Sciences Academy.

The share of the GDP that the Czech state spends in support of families stands above the EU average, the study, released five months before the general election, showed.

It showed, nevertheless, that the state pro-family policy fails to protect families against poverty and puts mothers in disadvantage on return to work after maternity leave.

The current pro-family policy system negatively affects the position of women on the labour market as well as natality in the country, the authors write.

“The Czech Republic mainly provides financial support for families, while the policies facilitating the women’s care of children, such as the involvement of fathers and boosting the relevant services, have been used insufficiently,” the study says.

However, foreign examples show that making child care easier for mothers is twice as effective than other measures aimed to raise natality.

The Czech state spends 3.14 percent of GDP on supporting families, compared with the EU average of 2.76, and 3.03, 2.61 and 2.06 percent spent by the neighbouring Germany, Austria and Slovakia, respectively.

Tax reliefs make up 0.93 percent of GDP in the Czech Republic, while the EU average is 0.29 percent.

The Czech share is the second highest among the EU countries, but the study writes that the tax system strongly supports the families in which only one parent earns money, because the tax reliefs apply to the taxpayer’s children and a spouse without his/her own income.

If the spouse earns money as well, his/her income tax is high.

“Since the ‘other’ earning spouse is usually the woman, the tax relief system exposes women to a very high taxation, which makes their return to work, after maternity leave, for example, disadvantageous,” the study says.

The offer of part-time jobs is very low in the Czech Republic, which also makes the situation difficult for women.

In the EU, 32 percent of women have part-time jobs, while it is only 9 percent in the Czech Republic.

Czech women often postpone their return to work. The gap between the income of men and women rises as a result, and never in their lives female workers see their pay catch up with their male colleagues, the study says.

The employment rate of childless women and mothers with grown up offspring in the Czech Republic ranks among the highest in the EU. However, it falls, the most steeply in the EU, in the category of mothers with children under four.

An improvement in women’s successful return to the labour market would help raise the income of their families, the authors write.

The Czech state spends 0.57 percent of GDP on services for families, compared with the EU’s average 1 percent.

Czech nurseries and kindergartens are attended by 2.9 percent of children under three, which is the second lowest share of all countries of the EU, where the average is 30 percent.

Kindergartens are attended by 78 percent of children aged between three and six, compared with the EU average of 83 percent.

“An increase in the pre-school facilities’ capacities would mean a net profit for the public budgets. Every new place in a kindergarten brings some 10,000 crowns a year to the public budgets [in the form of taxes and insurance fees],” the study says.

It says welfare benefits target the families in need insufficiently. Out of the state’s expenditures on welfare, 38 percent go to people endangered by poverty. The parental benefit, which makes up a large part of the welfare spending, is distributed evenly to all families regardless of their incomes, the study says.

Its authors have formulated 11 questions for politicians to answer ahead of the October general election. They concern issues such as the targeting of welfare benefits and tax reliefs, employment of mothers, measures against motherhood’s impact on women’s pay, flexibility of jobs, accessibility of pre-school facilities, the role of fathers in child care and measures in support of natality.

($1=23.393 crowns)


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