Finance Minister Zbynek Stanjura expressed confidence that the government’s consolidation package would garner support from both houses of the Czech parliament. He made these remarks during a press conference before the Chamber of Deputies commenced the debate on the package of measures. Stanjura stated that while the legislation would still undergo discussions within the coalition, if all government parties agreed on the amendments, they would be adopted. He also acknowledged the possibility of changes based on proposals from the opposition.

Stanjura emphasized that the total amount of planned savings would remain unchanged, and consultations would be held between the second and third round of discussions. The package of measures is intended to address the unsustainable state of public finances, according to Josef Bernard, the head of the Chamber of Deputies budgetary committee.

Representatives of the ruling coalition, including the junior government Christian Democrats (KDU-CSL) and Pirates, noted that their priorities were incorporated into the package. The Christian Democrats emphasized support for families, while the Pirates focused on support for employees. The proposed measures aim to reduce the state budget deficit by CZK 97.7 billion next year and generate CZK 150.7 billion over the next two years through savings in state spending, operational costs, salaries, and government subsidies.

However, the opposition ANO party argues that the package will harm the economy and impede growth, leading them to oppose the draft. Alena Schillerova, the chair of the ANO parliamentary group, criticized the consolidation package, claiming it was worse than the one presented by the government in May and contained illogical measures. Schillerova stated that the package had not been adequately discussed with employer and employee representatives, expressing concerns about its impact on the economy and describing it as a “toxic cocktail” for the Czech economy.

The opposition plans to challenge the passage of the draft, and filibustering is not ruled out. The Finance Ministry’s dismissal of major comments raised further criticism from the ANO party, which views it as an exercise of power. The opposition’s proposals, according to Jakub Michalek, chairman of the Pirates parliamentary group, would burden the state treasury with an additional CZK 700 billion in costs. The Pirates aim to increase labor market participation, support individuals in debt, assist former prisoners in reintegrating into the economy, and create conditions for mothers on parental leave to facilitate their return to their careers if desired. Additionally, they advocate for improving tax collection by strengthening the capacity and activities of relevant authorities rather than reintroducing electronic sales registration.

The debate on the government’s consolidation package is expected to be extensive, reflecting the magnitude of the proposed tax increases and potential amendments to address concerns raised by the opposition and various stakeholders.

Article by Prague Forum