As the shadow prime minister of the ANO movement, how do you evaluate austerity measures and pension reform?
The government press conference was a disaster, a show of vanity. They whined about nothing for an hour and then shortened the important things so that a few hours after the important announcements, not only politicians, but mainly those affected by the measures, i.e. trade unions, entrepreneurs and the like, have to search for information in a complicated way on the networks. So far, it looks like it’s a live execution of tradesmen. No one expected an increase in levies by seventy percent, this is in complete contrast to previous government promises. Let’s not forget that VAT will still increase for self-employed people. It will be a difficult situation for companies as well. In my opinion, increasing taxes by two percent will lead to greater optimization.
Obstruction? Of course. The government should link the discussion with a vote of confidence
What about subsidy cuts?
Here I am convinced that in the end it will not happen at all. It’s a trick, paper can handle anything. There, some things cannot be deleted at all, for example because of European subsidies, from which companies are compensated, for example, with emission allowances. I can’t imagine that at the present time, when the government has forced the Czech industry into a loop by approving all the European nonsense, it will still reach out to companies for subsidies to compensate them. The state will take a net six billion from the State Fund for Transport Infrastructure, where today there is a lack of thirty billion, Mr. Kupka solves it with a loan from the European Investment Bank.
Companies will also be affected by the increase in real estate tax by one hundred percent, but paradoxically it will not affect the municipalities that would benefit from it. The state will pocket it. The second segment that the government has run out with is pensioners. Either in the sense that they will have a lower growth in existing pensions, to which they were legally entitled.
This will be assessed by the Constitutional Court.
Yes, they will assess whether the cancellation of that claim was correct or not. In any case, there will be a reduction in the increase in pensions, which will fall on the most vulnerable part of the population. Simply put, we are driving them to the edge of poverty. But this government has only two tasks, to fight inflation and to fight poverty.
But pensions will still grow…
Also, I am not intentionally saying that pensions will be reduced, but that the rate of growth of pensions will be reduced. Raising the retirement age is a very ill-advised move. No one has any idea what it will be like in twenty, twenty-five years with regard to artificial intelligence and so on. Arguing that people will live to a higher age is complete nonsense. What is important is the condition in which people live to old age. A person at the age of 66 is not in better shape today than thirty years ago.
Do you agree with the government on the VAT changes?
Truth be told, the VAT area could have turned out worse. We expected the reduced rate to go from fifteen to fourteen percent, but it ended up being twelve. It won’t have such a negative effect on inflation, but I confess that I don’t understand the move at all. It is highly likely that the reduction of VAT will not affect prices, traders will keep it, but the increase of VAT will, i.e. water, sewage, etc. will be more expensive. I miss the point of this step, it will rather harm the budget without helping people. We agree with the increase in the consumption tax on hard alcohol and tobacco, the valuation of demanding professions is also correct.
Medicines, heat, water and beer will become more expensive. The food will not be cheap
Economic
If you were in the government, you would also be explaining the reform steps now. What would you do differently?
Our vision, which is something this government does not have at all, would be simple. To systematically reduce the structural deficit by half a percent of GDP every year, today it would be forty billion, and in five years we would be where we want to be. We would keep the investment that this government is now burying and people wouldn’t get even poorer. Mainly, we would keep the future income that entrepreneurs will always make, and we are throwing it overboard today.
The VAT increase is slightly pro-inflationary, but the state will lose billions
How exactly would you reduce the structural deficit?
It’s a mix of three steps. The first would be more consistent tax collection. We would re-introduce EET and use control reports more consistently, expand the powers of customs authorities, reverse charge, etc. There we would be able to get 14-20 billion. The second area is the reduction of state spending. Here, the government set the procedure correctly in principle, I wouldn’t blame it. Perhaps even more can be saved here than the government says, we are talking about twenty billion. The rest would come from an increase in consumption taxes, where we are in agreement with the government. We are getting to 40-50 billion. It is a doable thing.
Many economists praised the government for having the courage to do the pension reform, which your government did not do.
Yes, we didn’t do the pension reform. Not that we didn’t have the courage, but we couldn’t agree on it. What this government has presented is not a pension reform. If some self-proclaimed experts like Mrs. Nerudová claim that, then I’m only glad that she didn’t follow through on it during our government as the head of the pension reform commission. He can’t be serious.
What kind of pension reform is this? These are just parametric changes. We say that today we will change the valuation so that it is reflected in the state budget. I understand that, but it is not pension reform. Then we raise the retirement age in a completely thoughtless way. The third thing is related to early retirements, but this is not a pension reform. After all, it is about what the pillars will look like, how the employee and employer will be motivated, how the state will get involved, how it will be with regard to possible investments… I call this pension reform.
But this is a mockery. As well as other measures. The Coalition of Five came to power perhaps by promising not to raise taxes. And today he is raising taxes on several key items. We were still laughed at in the opposition for considering raising the property tax, but in the end we didn’t do it. Minister Stanjura said at the time that it was unacceptable, and today he is doing the exact opposite of what he said.
But then came the war in Ukraine, the energy crisis.
We had covid, we ruled in a completely unpredictable time. Today we forget that we didn’t know what the next day would bring. The whole world was closed, you couldn’t travel, you couldn’t do business. That’s also why we put money into the economy, but if we were to follow this government, we’d put 200 billion more into it. This government can only stand in the corner and shuffle its feet. I would have taken it if they hadn’t shouted back then that we should give entrepreneurs more. Let them shut up about us causing this problem.
Should we prepare for long obstructions in parliament?
Of course. I even think that the government should combine the discussion of these measures with a vote of confidence, if it has any sense. Let each of the coalition MPs stand up and say that they will raise taxes on self-employed people and companies.
The government probably won’t do it, so will you initiate a motion of no confidence?
We have to think it through. For us, the vast majority of things are completely unacceptable. But what I blame the government the most is that it did not discuss the material. Not with the opposition, we’re used to that. It is the height of arrogance that they did not discuss this with the social partners. From what do we have tripartite? How come this wasn’t discussed beforehand? It should have been adjusted there, not thrown on the table today and taken to the House of Representatives. If I were the head of trade unions or employers’ associations today, I would make such a fuss about tripartite that the government would have to end. So let them dissolve the tripartite. If the presidents of trade unions, employers’ associations or the Chamber of Commerce tolerate this, whether they like it or not, then they have failed, I say that with full responsibility.
A two percent tax increase will not drive companies out of the Czech Republic, say analysts
Economic
What should they do?
As for the unions, I hear they are ready to go on a general strike.
Will you coordinate the procedure with SPD?
We’ll meet at the club. If they have the same opinion about it, then we will be happy if they join.
Will you cooperate more closely with people who organize anti-government demonstrations, such as the PRO movement? You and Chairman Jindřich Rajchlo know each other from a joint business.
I haven’t seen Jindřich Rajchl for about eight years. Today, whoever is in the Chamber, who is strong in the regions and can create pressure, has influence. PRO is an emerging party and has some ambitions. I understand that they are demonstrating, we understand the people who go there, but we do not cooperate with them.
Disgusting, the execution of self-employed people, the opposition criticizes the consolidation package
Homemade
Why does ANO reject the government’s proposal to change the assessment basis for the salary of constitutional officials, according to which politicians’ salaries would rise next year, but only by seventy crowns per month? That is a negligible amount.
We want to freeze politicians’ salaries, period. And that until the end of the 2025 election period and then reduce further growth, i.e. make such an adjustment so that it does not grow by leaps and bounds.
