Current Affairs Lower house postpones crucial decision on tax package
Coalition MPs in the Chamber of Deputies on Tuesday postponed a crucial vote on a controversial tax bill until next week in the hopes that by then the troubled Civic Democratic Party will have its house in order. Six rebel MPs within the party have not budged on their promise to vote against the bill if it includes the proposed tax hikes. That has not only shaken Prime Minister Petr Nečas’ position within the party, it could bring down the centre-right government.
Tuesday saw no break-through in talks between Civic Democrats toeing the party line and six rebel MPs who – since September – have warned they will not raise their hands in favour of the proposed tax hikes. Originally, the bill was to increase the country’s dual-VAT rates by one-percent for three years and boost personal taxes for high income earners, but even a concession on the part of the prime minister to raise only the lower rate as well as limit the high earner increase to only one year, was not enough. Again, as in previous talks, no deal was reached; the head of the Civic Democrat working group Zbyněk Stanjura:
“The group has ended the discussion, agreeing that no solution had been found.”
This forced the prime minister’s hand: with the clock ticking he requested the lower house to postpone final deliberations and the vote on the bill until next week. The legislation is tied to a confidence vote and there are fears that unless the rebels budge, their votes against the bill will bring down the government. The prime minister, on the other hand, faces re-election at the Civic Democrats’ party congress on Saturday and if he is successful he will arguably regain authority to exert renewed pressure on the rebels to reach a last-minute agreement.
That would be a better position he has been in until now, on the other hand, there are no guarantees. The party chairman – who so far has only been nominated by only four of seven regions – could also lose and leave whoever replaces him with the unenviable task of trying to pick up the pieces. All the while, the other two parties in government – TOP 09 and Lidem – are being patient. They acquiesced on Tuesday to postpone a vote on the controversial bill but made it clear they can only go so far; finance minister and deputy leader of TOP 09 Miroslav Kalousek:
“We want to see a clear position taken by the Civic Democrats. Whether they cook up a deal at a restaurant or in MP Tluchoř’s kitchen, we don’t care. We just need a stance.”
Whether the prime minister can regain his footing is now the big question to be answered within days. Much will depend not only on his successful re-election but also on who is elected into the top leadership, whether Mr Nečas will retain allies or lose them and face increasing pressure. Speaking of which, his position on Wednesday was not made easier, either: one of the rebellious six – Radim Fiala – announced that after 15 years he was leaving the Civic Democratic Party altogether, citing ideological differences. This means that after two and a half years in government the centre right coalition which started out with a comfortable 118-mandate majority in the lower house has now certainly lost it.