Poland’s main opposition party Law and Justice (PiS) has fired the opening salvo in what some of its politicians are labeling their “autumn offensive,” by presenting its economic proposals for Poland.
PiS leader Jarosław Kaczyński has called for the unification of the personal and corporate income tax codes, zł.300 vouchers for poorer families to spend on sending their children to preschool, undoing the recently passed pension reform which raised the retirement age to 67 for both men and women, and increasing tax rebates for families with more than one child.
Mr Kaczyński has also called for the introduction of a turnover tax for banks and retail chains, a 10-year plan to combat unemployment and create 1.2 million jobs, and the abolition of taxes for pensioners receiving less than zł.1,000 a month. He also said he wants to reduce social security contributions, although he offered scant details.
Prime Minister Donald Tusk was quick to respond, saying the PiS proposals don’t take into account the “context of the crisis.”
“I would also like to say what could be done in Poland while closing my eyes and covering my ears to what is spreading around the world, Europe and Poland,” he said.
Finance Minister Jacek Rostowski went further, describing the proposals as amounting to nothing more than a “classic financial pyramid.” Mr Rostowski said the cost of the proposals are “unsustainable in the medium term,” putting their price tag in 2013 at zł.62.6 billion, far more than the zł.12-13.5 billion that the PiS leader had said they would cost.
“In the first year of implementation, the changes proposed by [Mr Kaczyński] would be double the amount of the deficit planned for next year,” he said.
Mr Kaczyński, meanwhile, claims his proposal to reduce the social security burden would cost the state zł.9 billion, while zł.3 billion would be needed to launch his jobs program. Add to that zł.1 billion for his pro-family proposals and zł.400 million for eliminating tax for pensioners receiving under zł.1,000 a month.
He said that his proposals for simplifying the tax system, plus the bank tax, would earn the government an extra zł.11 billion. He also said that the state should be able to reduce the size of its administration, reforms which would mean his program would have a net cost of zero or “very little.”
Economists criticized the PiS proposals. Przemysław Kwie-cień, chief economist at X-Trade Brokers, called the proposals a “stimulus” program that Poland couldn’t afford right now.
“The positive effects are uncertain, while the risk is great,” he said.
From Warsaw Business Journal by Remi Adekoya
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