13 December 2013

ČTK: New Czech coalition vows to raise pensions and minimum wage

The new Czech coalition of Social Democrats (CSSD), the ANO movement and Christian Democrats (KDU-CSL) promised to increase pensions and the minimum wage as well as to cancel most health fees in their coalition pact.

The three parties with a 111-vote majority in the 200-seat Chamber of Deputies agreed on the coalition pact on Thursday. Social Democrat leader and probable future prime minister Bohuslav Sobotka said the agreement mainly included principles and trends, with many of its points only being formulated in a general fashion. He said the agreement could be described as a programme of essential change and mentioned the economic policy, the state's financial management and the government's steps in pushing through the changes.

Agro and media mogul Andrej Babis, who heads ANO (YES), said that the state was in disruption and only functioned by inertia. All the ministries ANO's representatives would be in charge of would "make brutal cuts". KDU-CSL deputy chairman Marian Jurecka said it was important for the party that its priorities had been inserted in the pact.

In the 50-page document, the coalition in the making promises not to change taxes next year. It wants to submit any changes to tax laws to the general public for comment. As of 2015, it plans to increase taxes on gambling and to introduce a lower VAT on drugs, books, baby food and diapers. "In order to finance the change, the coalition will consider imposing a sector tax on regulated branches as of 2015," the report said. Starting in 2015, the coalition partners want to increase the tax reliefs for the parents with second and third children and introduce the birth benefit for the second child, too.

The coalition will cancel the concept of super gross salary and solidarity surcharge for people with high incomes. Instead, it will introduce the second tax rate on individuals' incomes to neutralise the impact on the budget. The minimum salary is to be increased to approach 40 per cent of average salary. The fall in revenues is to be compensated with growing resources from the state budget, especially by increasing the payment for the persons insured by the state.

Public investments are to go primarily to the insulation of buildings, retention of water in the landscape, transport and public infrastructure as well as social and health services reacting to population ageing. The coalition plans to increase the resources of the State Fund for Transport Infrastructure (SFDI) to make its total resources approach 2 per cent of GDP.

Full article

© ČTK