The reform of the pension system will only decrease the cost of debt servicing and the cost of refunding contributions – a total of PLN 9 billion. The government will not spend any more, as it pursues fiscal consolidation within the excessive deficit procedure - says Dariusz Rosati, Chairman of the Public Finance Committee of the Sejm.
The economic slowdown has inflamed the dispute between the Ministry of Finance (MF), which is responsible for the state budget, and local governments. Mutual accusations are the same: handing out deductions lavishly and in a discretionary way and looking for savings everywhere but in their own pockets. Local governments warn that if this continues, hundreds of communities will have a problem with passing their budgets and financing a down payment for EU projects.
The Ministry of Transport, Construction and Maritime Economy promises that the construction of the faulty network of motorways and expressways will be completed by 2020. This will, however, be achieved partly at the expense of investment in lower category roads. Consequently, European Union funding for investments that are less important on the national level, but nevertheless constitute major investments, will be shut off.
Four months into budget implementation, the State budget deficit amounted to PLN 31.7 billion, that is nearly 90 per cent of the total value planned for the year. It is almost certain that tax revenues will be lower than expected. The introduction of an amendment to the budget act, the first one since 2009, is however uncertain, as this is always a last resort measure for any government determined to protect its public image.
We have a huge layer cake from Brussels – more than PLN 300 billion. There are reasons for joy of successful negotiations. Yet, the rhetoric of the success of the battle for each euro cent should fast give way to reflections on how the funds will be used. Experts remind us that the growth of productivity in the economy is already zero, and EU funds are in fact social and not development expenditure.
In 2013, the Minister of Finance will prepare for taxpayers modified regulations concerning, among others, limited joint-stock partnerships, proxies and VAT deductions on cars and fuel. Maciej Grabowski, Deputy Minister of Finance, in the interview announces also the opportunity to support science and innovation with 1% of CIT.