The budget for 2016 is to encourage the demographic policy, and the program “Family 500 plus” can be a stimulus for economic growth.
The draft budget for 2016 recorded GDP growth of 3.8 per cent., And inflation at 1.7 percent. The deficit should not be higher than 54.7 billion zł.
According to deputies of Law and Justice budget for 2016 is just and solidarity. The opposition criticizes the ruling spoiling the country, increasing debt and tax increases.
A lot depends on the level of inflation …
The assumptions for this year are realistic, are in fact money auction LTE and 5 billion higher than expected profit of the Polish National Bank, so there should be no problems with the implementation of the budget.
– the government of supplying a draft to the Parliament adopted assumptions such as the previous government to put out the budget law. As for economic growth, it is a realistic assumption. 3.8 percent. growth we are able to achieve in 2016, but my forecast is 3.7 percent. More worries me adopted by the government inflation forecast, because she is very optimistic, especially if we look at what is happening in the commodity markets, where oil is much cheaper, which means that instead of exit from deflation in the fourth quarter of 2015 years – still it stuck. I probably will in the stuck for 1 – 2 months – says a guest of the Polish Radio 24 Adam Czerniak, an economist Policy Insight School of Economics.
This will probably mainly due to the price of oil in the world, which means that also in our less pay for fuel.
… and from the proceeds of VAT
that is why, in connection with low fuel prices, inflation at 1.7 percent. certainly we do not see as an average for the whole year. It can not even see it at the end of this year.
– For me only in December inflation will be at 1.5 percent. And this is the optimistic forecast. This highly-founded inflation causes are equally optimistic forecasts of tax revenue. Because VAT revenues are directly dependent on what are the prices in the shops, and the slower growing these prices, the slower growing VAT revenues – draws attention to guest PR 24.
He adds that while forecasts growth are very optimistic, it was a very conservative forecasts so. starting point. Ie very low they were founded forecasts of VAT receipts for 2015 years. Because of that, if income growth will probably lower, the same level of income will be similar to what the government founded. – I think that the prices of oil and food prices will continue to fall, then the income from VAT will be lower. And that will be a problem for your budget and you will find some supplement these revenues – says Adam Czerniak.
Lower inflation is bad news for the Finance Minister, because if prices fall, the smaller the tax revenues.
Expenditure and revenue …
The project reserved money include to finance the program “Family 500 plus”, the introduction of free drugs for people who have completed 75 years of age, as well as to increase by more than 2 billion zł pay for groups of employees that were included in the so-called. freezing salaries.
The project also ensures funds for one-time allowances for pensioners, pre-retirement, bridging pensions, teachers’ compensation benefits, funds for financing restructuring tasks in the coal sector, to increase spending on national defense to the amount of 2 percent. GDP, which is nearly 3 billion zł more than in 2015.
However, after the revenue side is the money from the auction LTE, the amount of over 9 billion zł, and profit from the NBP.
– and the Ministry of Finance and the government are in luck this year, because these additional revenues from LTE and about 8 billion profit NBP really give a large sum. This can be financed almost the entire program “Family 500 plus.” With this income, in spite of these increased costs, we will not see growth in the public finance deficit. And this is very good news. But on the other hand, this is bad news because it shows that the program, which is to be long-term, is financed from current revenues, which are one-off and will not be repeated – says a guest of the Polish Radio 24.
… or debits and credits
however, we also have two additional taxes, the assets of the bank will come into force on 1 February, and the government obtains this respect approx. 5 billion zł. Pending before the tax from the retail trade. Proceeds from this tax is approx. 2.2 billion zł.
– But it’s all too little to finance the program, which costs more than 20 billion zł per year. This year, we finance it with disposable income. And this is disturbing, because the long-term finance spending increases in short-term income is thereby worsening structural deficit. That is, one that does not depend on one-offs, since fluctuations. And if you are increasing the structural deficit, it means that sooner or later the actual deficit or we will shoot up, and it is above the level of 3 percent. Therefore, you should think of how to obtain permanent financing for the program “Family 500 plus.” For now, there is only 1/3 of the program financed with new taxes. The remaining part is not sustainable funding – says Adam Czerniak.
Concerns about finances in 2017
The budget problems the state in connection with the financing program “Family 500 plus “, however, may occur, according to economists, next year, because however child benefits are longer.
– why greater mystery of 2017, when the costs of the program” Family 500 plus “rise significantly, and the budget will not be eg. the proceeds of the auction LTE. And once introduced program will be very difficult to reverse. Hence the question, how this gap is to be filled in the next few years – wondering guest Ones Marek tatal, a board member and economist FOR Foundation.
And he adds that probably because part of the promise is postponed for later. So it is with the amount of tax-free, or lowering CIT for the smallest companies. What is used as an argument for the coming years, it is also the seal of the tax system.
– The Polish tax system is leaky and you can download more money, but these forecasts, how it can be done, is overestimated. Because of the larger checks and controls do not come so much income. A better way to his seal would be his dramatic simplification and making it combining the tax will not pay off. It should also be noted that these new taxes on banks and the supermarkets come in this year, but the company you are living organisms and will be wondering this year, how in the next year to pay this tax at a lower level – draws attention Marek tatal.
You can hear because of the sharing of commercial networks for smaller companies to reduce the sales tax. The problem for next year is not only that it lacks tens of billions of zlotys, but that those already introduced taxes the state budget will be able to receive fewer resources. – When companies learn and those taxes optimize, because as they do with any type of tax – emphasizes the guest radio Ones.
Very important deficit
And as further enhance the experts should also use good economic situation to consolidate public finances.
– European countries not to seek not so much to balance the budget, were actually only Germany. And France, and Spain moved away from such strong cuts in public spending after only not to weaken economic growth. In Poland there was this change in fiscal policy, in connection with the elections. The previous government held on this to reduce the public sector deficit, it was called. MTO goal, which is the medium-term fiscal target. I eventually had a deficit of approx. 1 per cent. GDP. The current government has completely abandoned the idea and wants to keep the deficit at EU level, 3 percent. GDP. That is the fiscal target was shifted by 2 per cent., Which is negative from the point of view of debt, because it will be harder to disprove public debt in the coming years. And we should take advantage of good times to reduce public debt to GDP ratio – explains the guest Polish Radio 24.
In addition, the maintenance of this medium-term deficits at 3 percent. GDP raises the risk that a downturn is the deficit we “shoot”. Just as it was in 2009.
– And now, among others, after the experience of the Greek Union representatives have come to the conclusion that the limit of 3 percent. GDP is not sufficient. After it was adopted so the medium-term objective of public finance deficit and the MTO is consulted on these targets with all countries of the EU that they tried to overcome this deficit. That in a crisis situation, when the deficit “shoot” it so it was not too high. And so it was not a threat to public finances. It is therefore unfortunate that the government now moving away from this – notes Adam Czerniak.
How assesses Marek tatal expenditures are already planned, incomes are quite uncertain, which can make in conjunction with forecasts that the budget can but do not fasten and will require amendment.
– it is worth noting that the budget deficit is at a record high level. Most EU countries reduce the deficit, and Poland is among the four countries, which this year will increase the deficit. In these uncertain times, when most economies responds to the uncertainty that is in the world, which is about China, about Greece – it is worth to have a safe and stable public finances. And this budget does not give such guarantees. Firstly, the uncertainty of income, and secondly by overestimated forecasts – says visitor Radio Ones.
“Family 500 plus”, that demographic changes and changes in the labor market
We do not know what to say, the European Commission, which currently forgives some countries towards that aim. When negative feedback, there would in fact be possible to implement the program “Family 500 plus”, and these benefits certainly Poles are waiting.
– This program it will be a short-term injection of cash to households raises on economic growth in the short term, but in the long weaken it, and what is worse – will reduce the activity of Poles. As a result, while bring additional increases due to the greater number of births, the same time the number of economically active people, that is what, from an economic point of view, we should also, fall. Because the “family 500 plus” is a very strong incentive to not to enter the labor market. Especially for those who are called. second earners in the household, or women. One at the moment, with additional income 1000 – 1500 zł will not want to undertake paid work – says Adam Czerniak.
And he adds that when these additional revenues will be over, that person will have a very big trouble. to find employment. She will not because the relevant competence and will be much less competitive for employers, compared with peers who are still in the labor market.
But even with these concerns, certainly the government’s program to counteract the negative demographic trends is simply essential.
Krzysztof Rzyman, Sylwia Zadrożna, Blazej Prośniewski, Margaret Byrska
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