Warsaw (Puls Biznesu) – Yesterday, the government preliminary accepted the budget proposed by Minister of Finance Miroslaw Gronicki. The draft provides for revenues of PLN 189.228 billion (EUR 48.3 billion), expenditures of PLN 221.803 billions and deficit of PLN 32.575 billions. “It would have been better hadn’t it been for the election gift in the form of VAT return law for construction materials. The law will cost the budget PLN 3 billion. Hadn’t it been for this law, there would be no necessity to raise fuel excise duty in 2006 and look for additional savings. The MPs of today’s opposition and the future government may blame themselves”, Janusz Jankowiak, BRE Bank chief economist commented.
The future coalition: Law and Justice (PiS) and Citizens’ Platform (PO) have other plans. “Budget bill of the old government will be treated as analytical material but no political pledge”, Artur Zawisza, PiS MP said. In his opinion, it is possible to introduce changes allowing for savings as early as this year. “Our proposals concern budget consolidation and closing some institutions”, he added. His party will accept maximally PLN 30 billion of budget deficit. PO wants deeper cuts. “We hope to change taxes this year. The main changes will concern spending, which should be cut whenever possible. They should be cut by PLN 5-10 billion. This is our proposal”, Rafal Antczak, PO’s economic advisor said.
Economists are sceptical. “I don’t believe that parties which approved of the VAT law would try to change it after elections. Savings may be found in administration”, Marek Nienaltowski, Palladia Capital Markets chief economist commented. Janusz Jankowiak believed there will be too little time to introduce tax changes in 2006. “All bills would have to be published till November 30th, and before be approved by Parliamentary commissions, three readings in Sejm, Senat and the President. This President”, BRE Bank economist explained. Polish President Aleksander Kwasniewski supports SLD social-democratic party. PO and PiS are central and right parties.The government assumes that the GDP growth will amount to 4.3 percent and CPI to 1.5 percent.(PLN 1 = EUR 0.255)
Poland/Economy/Budget