Czech govt to withdraw budget from parliament,FinMin to rework it

Kalousek (TOP 09) said he has agreed on this with Prime Minister and ODS chairman Petr Necas.

As a result of turbulences in the senior ruling ODS, the government lacks a majority of votes it needs to push through a tax package aimed to raise the state revenues, with the effect of which the 2013 budget bill reckons, Kalousek said.

He said he will submit a new draft state budget, based on valid laws, in a month.

Necas, who still fails to make several ODS rebel MPs to support the tax-rising package, too, said it is not clear whether the package will make it through the Chamber of Deputies.

"As a result, the government of budget responsibility must base its budget bill on realistic data," Necas said.

Under a law passed earlier this year, the two VAT rates, now 14 and 20 percent, are to unify at 17.5 percent as from next year.

The tax package and the present budget bill project each rate´s increase by one percent to 15 and 21 percent, respectively, which has been resolutely opposed by six ODS rebels.

Necas said the present budget bill counts with some 20 billion crowns worth of state revenues secured by the tax package.

A responsible and honest government therefore has to withdraw the draft bill, he said.

In the present complex situation, the government of the ODS, TOP 09 and LIDEM cannot rule without a majority enabling it to push its programme priorities through the lower house of parliament, said Kalousek.

"It is unacceptable for the finance minister, and I suppose it is also unacceptable for the government, that the finance minister would in the first reading push through certain binding state budget parameters, which lean on legislation that evidently will not come into force. It would simply be an untrue budget," Kalousek told journalists.

He blamed the ODS internal rebellion for the government´s loss of its majority in the lower house of parliament that it needs to push through new budgetary measures (the tax increase) whose effect has already been incorporated in the 2013 budget bill.

It ensues from the ODS´s turbulences that the government will not manage to push through the measures in their original form [outlined by the Finance Ministry and approved by the cabinet], Kalousek said.

He said if the tax package were finally passed, its effect could be worked in the new budget bill that he is going to prepare.

"However, if it is not passed in foreseeable future, I´ll ignore it," he pointed out.

He repeated that he will not submit a new budget bill with a deficit exceeding 3 percent of GDP. Such cutting of the deficit will enable the Czech Republic to close the proceedings over excessive budget gap, launched by the EC, he said.

($1=19.055 crowns)

Author: ČTK
www.ctk.cz