Czech Parliament Passes 2024 Budget With CZK 252 Billion Deficit

The budget bill will now be sent to President Petr Pavel to be signed into law. Credit: Freepik. 

Prague, Nov 30 (CTK) – The Czech Chamber of Deputies last night passed the state budget for next year with a deficit of CZK 252 billion, supported by votes of the ruling coalition parties and despite criticism from the opposition.

The planned deficit is to fall by CZK 43 billion from this year. This is the third state budget pushed through by the five-party coalition government of Prime Minister Petr Fiala (ODS).

The budget bill will now be sent to President Petr Pavel to be signed into law. The Senate does not deal with budget matters.

Out of the 181 MPs registered for the vote, 98 MPs from the ruling coalition voted in favour of the budget, joined by Ivo Vondrak, an unaffiliated MP originally elected for ANO. Opposition MPs voted against.

Before the final vote, the MPs approved 13 transfers within the budget, totalling CZK 2.7 billion, including CZK 1.1 billion to support the water management sector. The opposition proposals to transfer funding failed.

The lower house also voted to transfer a total of CZK 12.2 million to so-called memory institutions, on the proposal of a group of coalition MPs. These include the Masaryk Democratic Movement, the Czechoslovak Legionary Community, and the Society for the Preservation of the Legacy of the Czech Resistance. Another proposal approved by a group of coalition MPs transfers CZK 120 million to the restoration of the Bohemian fortress towns of Terezin and Josefov.

The budget is based on the assumption of 2.3% economic growth and 3.9% growth in household consumption, the latter expected to be driven by a renewed increase in real incomes. The average inflation rate is expected to fall to 2.8%, from 10.9% this year.

Compared to this year, the budget revenues projected for 2024 will increase by CZK 12 billion to CZK 1,940 billion. The expenditures are projected at CZK 2,190 billion, a drop of CZK 31 billion from 2023.

Finance Minister Zbynek Stanjura (ODS) described the budget as responsible. He told MPs that the total expenditure on education will increase by CZK 3.9 billion year-on-year, and its share in the total budget expenditure will rise to 12%.

The budget expenditure on health will increase by CZK 5.1 billion and its share in total expenditure will increase from 7.2% to 7.5% year-on-year.

Furthermore, CZK 184.2 billion is earmarked for investments, the third highest amount in the last ten years, said Stanjura.

Of the opposition MPs, Jan Hrncir (SPD) failed with his proposal to remove CZK 30 billion from the EU budget and allocate the money to compensate households and companies for higher energy prices. Karel Havlicek and Alena Schillerova (both ANO) also failed to have CZK 27 billion added to renewable energy sources or CZK 38 billion to mitigate the rise in energy prices.

The government’s stated priorities for the budget are maintaining social peace, ensuring a stable and transparent way of financing healthcare, ensuring teachers’ salaries at 130% of the average wage, and ensuring spending of 2% of GDP on defence.

PM Fiala told MPs in the debate that the average teacher’s salary will rise to CZK 52,400 a month next year. The average pension is to rise to CZK 20,635 from January. The expenditure of the state debt chapter will increase by CZK 25 billion to CZK 95 billion next year, he said.

“The Czech Republic’s economy as it was created here under previous governments was completely unsustainable,” Fiala said,and asserted that the government was cutting back on the state. The overall budget spending would fall for the first time since 2016 and that the number of state employees would also fall, he said.

As usual, the budget drew criticism from the opposition benches. ANO leader Andrej Babis, who was prime minister from 2017 to 2021, accused the Fiala cabinet of “totally destroying this country”.

ANO parliamentary group chair Schillerova said the budget increases operational expenses while cutting pro-growth investments. “This is not the budget of a confident and prosperous country with one of the lowest public debts in the European Union, which wants to go forward and upwards,” she said.

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