The lower house of Parliament is expected to approve a government tax
package at its session starting on Tuesday. It includes a proposal to raise
taxes on alcohol and tobacco products, and an increase in parental
The basic parental allowance could rise from 80,000 crowns to 300,000 crowns. MPs are also due to start discuss the draft state budget for 2020, which counts on a 40 billion crown deficit.
In the initial round, MPs will approve the budget’s basic parameters, i.e. revenue, expenditure and deficit. MPs have tabled dozens of amendments to the tax package, only some of which the Committee on Budgets has supported thus far.
On Friday, Prime Minister Andrei Babiš (ANO) and Communist party leader Vojtěch Filip agreed to allocate an additional 4.9 billion crowns for the health sector. Originally, 334 billion crowns was earmarked for the sector.
Communist Party leader Vojtěch Filip announced on Friday that his deputies
will likely support the 2020 state budget proposal presented by the finance
The government of Prime Minister Andrej Babiš (ANO) in mid-September proposed a 2020 budget with a deficit of 40 billion crowns, the same as planned for this year.
Filip’s announcement came following a meeting with Mr Babiš and Minister of Finance Alena Schillerová (ANO). The minority coalition government with the Social Democrat relies on Communist tolerance.
The Communists have used their role as kingmaker several times to win major concessions. ANO was obliged to support their proposal to tax compensation awarded churches in lieu of property seized by the former regime that could not be returned in restitution.
Prime Minister Andrej Babiš and Finance Minister Alena Schillerová are
due to discuss next year’s state budget with representatives of the
Communists on Friday, iDnes.cz reported. The party’s executive committee
will be holding an extraordinary meeting that day and the government
officials hope to persuade them to back a CZK 40 billion deficit when the
2020 budget is voted on.
Communist MP Miloslava Vostrá, who is chair of the lower house’s budget committee, said at the end of August that she would recommend her party leadership support the budget, despite the CZK 40 billion deficit. The party had previously demanded that the deficit not exceed CZK 30 billion.
Under an agreement, the Communists support the minority government of ANO and the Social Democrats on key votes.
Prime Minister Andrej Babiš’ cabinet approved the 2020 draft budget on Monday, just hours after trade union leaders and employers expressed support for it. The compromise proposal which respects a 40 billion crown deficit ceiling should see more money spent on pensions, social services, teachers’ wages, parental benefits as well as research, sport and investments.
The government on Monday approved the draft budget for 2020 with a
projected 40 million crown deficit.
The government session, attended by President Miloš Zeman, was preceded by a meeting of the tripartite at which trade unions and employers expressed support for the draft proposal, which counts on higher pensions, higher salaries for teachers, more money for social services and families with children and increased spending in the fields of research and investments.
President Zeman made it clear that he would sign the budget, once it is approved by the lower house of Parliament.
The state budget is even less prepared to deal with a period of recession
than it was ten years ago, according to a report by the Supreme Audit
The report is critical of growing mandatory expenditures and a strong dependence on tax revenues, noting that even a slight recession would bring an increase in the state deficit.
The office says that last year mandatory expenditures rose to 1069 billion crowns, amounting to 75 percent of the state budget. The budget proposal for 2020 counts on a 40 billion crown deficit.
The draft state budget for 2020 that the Ministry of Finance forwarded to
the government at the end of last week anticipated both revenues and
expenditures some CZK 20 billion higher than figures approved at the end of
June. However, the planned deficit of CZK 40 billion is not affected by
this, the minister of finance, Alena Schillerová, told Czech Television.
The minister said the increased revenues and expenditures were due to a change in the macro-economic indicators.
The Ministry of Labour and Social Affairs is to receive an additional 5.9
billion crowns in state funds in 2020, Labour Minister Jana Maláčová
said following marathon talks on money matters with Finance Minister Alena
Extra money for IT projects, as requested by the labour minister is still to be debated.
The draft budget for the ministry was originally set at 676.4 billion, a sum that Ms. Maláčová said was woefully inadequate for the tasks at hand. She had originally requested an additional 11 billion crowns.
The Environment Ministry is to receive an additional 250 million crowns
from the state budget next year to fight drought, bringing the
ministry's 2020 budget to 16 billion crowns, Environment Minister
Richard Brabec said following talks with Finance Minister Alena Schillerova
on Thursday. The additional funds are to be used for long-term landscape
changes, the construction of artificial water basins, wetland restoration
and support for water saving projects.
On Monday, scientists from the Czech University of Agriculture, who conducted a study into the possible future impacts of drought on the Czech economy, said that the state should spend at least CZK 25 billion annually in order to contain water in the country’s soil.