Prime Minister Petr Fiala of the ODS party made it clear that there is no room for fundamental changes in the government’s recently announced austerity package. During a televised debate program, Fiala stated that the cabinet would not yield to any pressure and would only consider making adjustments if there were significant shortcomings or obvious errors in the proposals.

The austerity package, presented by the coalition government comprised of ODS, KDU-CSL, TOP 09, STAN, and Pirates, consists of 58 separate measures aimed at reducing the state budget deficit by CZK 94 billion in the next year. The government plans to implement various measures, including raising corporation tax, property taxes, and excise tax on tobacco, alcohol, and gambling. Additionally, they intend to reintroduce sickness insurance for employees and raise social insurance payments for sole traders and the self-employed. The primary objective of these measures is to reduce the public deficit through cost-cutting, particularly by reducing state subsidies.

Prime Minister Fiala firmly dismissed the notion that any significant changes could be made to the core elements of the package. He emphasized that the government would not give in to pressure from various stakeholders, including potential strikes and protests. However, he did acknowledge the possibility of addressing imperfections and obvious mistakes in the proposals, while emphasizing the need to evaluate the measures as a whole.

Fiala defended the government’s stance against criticism from trade unions, highlighting the ongoing dialogue between the cabinet and employee representatives. He noted an upcoming meeting of the Tripartite Council, further emphasizing the government’s commitment to engaging with stakeholders.

The prime minister reiterated the government’s determination to proceed with the planned cancellation of tax exemptions for certain employee benefits, even if there is agreement among employees and employers to retain them. Fiala expressed the government’s resolve not to give in on individual issues, emphasizing the need to move away from a subsidy-based economy and address the opacity and flaws of the existing tax system.

In conclusion, Prime Minister Fiala’s statements underscore the government’s steadfastness in implementing the proposed austerity package, signaling a firm commitment to reducing the state budget deficit and addressing long-standing issues within the tax system. While adjustments may be made to address shortcomings, the core measures are expected to remain intact despite potential opposition.

Article by Prague Forum