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2018 budget to rise pensions, wages, welfare, defence

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Prague, May 22 (CTK) – The Czech state budget for 2018 projects a rise in pensions, wages, social benefits and the defence spending, Finance Minister Andrej Babis (ANO) told journalists yesterday, adding that the proposed 50 billion deficit arose from an agreement of the coalition parties.

According to the draft budget, pensions are to rise by roughly 500 crowns a month, which will demand the additional 21.6 billion crowns.

In addition, the draft wants to rise the salaries in the civil service by 21.8 billion crowns.

The budget of the Defence Ministry is to increase by 5.4 billion to 57.9 billion crowns.

Commenting on the draft budget, Prime Minister Bohuslav Sobotka (Social Democrats, CSSD) said it reflects the pieces of legislation that have either been approved or are to be approved and are binding on the state budget.

He said the cabinet will approve the budget and send it to the Chamber of Deputies by the end of September. However, it will have to do so once again after a new Chamber of Deputies emerges from the October 20-21 general election, Sobotka said.

“With the election of a new Chamber of Deputies, all discussed bills are swept away. I expect the budget to be submitted to the Chamber of Deputies again after the election, and that it will be the budget bill drafted by the current government,” Sobotka said.

“I think that the draft is good, dealing with important affairs,” Babis said.

Babis said his today’s press conference was apparently his last public appearance in the post of finance minister.

Sobotka has decided to dismiss Babis and replace him with Ivan Pilny (ANO).

Babis said he believed Pilny would accept the draft budget.

“Since Pilny understands this, I presume that he will identify with this,” Babis said.

He said he presumed he would not have to give any advice to his successor on the work on the budget.

Babis said Pilny was likely to be tougher in the talks on the budget with ministers.

He said he disagreed with Pilny’s proposals to introduce tuition or to limit the across-the-board rise in wages and benefits, also because the government had to observe what it had pledged to do in the coalition pact.

The planned expenditures are to be 1342 billion crowns and revenues 1292 billion crowns.

This year, the budget projects a deficit of 60 billion crowns. Its total revenues amount to 1249.3 billion crowns and expenditures to 1309.3 billion crowns.

The 2016 budget was projected with a deficit of 70 billion crowns, but it ended in the surplus of 61.8 billion.

Babis said when drafting the budget, the use of European money posed a problem.

Next year, the Finance Ministry would like to reduce the budget deficit by 10 billion crowns.

It also wants to increase the state payment for insured persons by 3.4 billion crowns and the support for sports by one billion crowns from six to seven billion crowns.

Research, development and innovations are to receive 500 million crowns more than this year.

Babis said at the close of the year, the state debt would be 1613 billion crowns, just like last year.

Babis said during its tenure, the government had reduced the state debt by 70 billion crowns.

($1=23.710 crowns)

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