New Czech coalition vows to raise pensions, minimum wage

Předsedové ČSSD a hnutí ANO Bohuslav Sobotka (v popředí uprostřed) a Andrej Babiš (čtvrtý zleva) a místopředseda KDU-ČSL Marian Jurečka (třetí zprava) vystoupili 13. prosince v Praze spolu s dalšími členy vyjednávacích týmů na tiskové konferenci k představení programové části koaliční smlouvy.

published: 13.12.2013, 11:18 | updated: 13.12.2013 12:46:58

Prague - Czech Social Democrats (CSSD), the ANO movement and Christian Democrats (KDU-CSL) promise to increase pensions and the minimum wage as well as to cancel most health fees in their coalition pact they presented to CTK today.

The three parties with a 111-vote majority in the 200-seat Chamber of Deputies agreed on the coalition pact on Thursday.

Social Democrat leader and probable future prime minister Bohuslav Sobotka said the agreement mainly included principles and trends, with many of its points only being formulated in a general fashion.

"This is no policy statement, this is no list of specific bills," Sobotka said.

He said the agreement could be described as a programme of essential change.

Sobotka mentioned the economic policy, the state's financial management and the government's steps in pushing through the changes.

"We do not want any permanent revolution, we do not want any permanent chaotic reform," Sobotka said.

"We are glad that it is over. It was long and gruelling. I have never in my life negotiated so long. Normally I negotiate for 30 minutes," agro and media mogul Andrej Babis, who heads ANO (YES), said.

He said the state was in disruption and only functioned by inertia.

"We will make our best to fulfil what we have said," Babis said.

He said all the ministries ANO's representatives would be in charge of would "make brutal cuts."

KDU-CSL deputy chairman Marian Jurecka said it was important for the party that its priorities had been inserted in the pact.

"It is already obvious in the preamble that includes the words of and emphasis on the family and social market economy," he added.

Jurecka said he would be glad if there were a stable, predictable environment in the Czech Republic for four years.

"Above all, the established slogan 'those who do not steal, rob their families' should be eliminated," he added.

As of 2015, the VAT on drugs, books, baby food and diapers will be lowered.

The deficit of 3 percent of GDP is to be maintained by a better tax collection and cuts in the civil service.

In the 50-page document, the coalition in the making promises not to change taxes next year. It wants to submit any changes to tax laws to the general public for comment.

As of 2015, it plans to increase taxes on gambling and to introduce a lower VAT on drugs, books, baby food and diapers.

"In order to finance the change, the coalition will consider imposing a sector tax on regulated branches as of 2015," the report said.

Starting in 2015, the coalition partners want to increase the tax reliefs for the parents with second and third children and introduce the birth benefit for the second child, too.

They will renew a tax relief for working pensioners. Pensions will be regularly increased by the inflation rate and one-third of the growth in real wages as of 2015.

The coalition wants to abolish the second pension pillar, the cornerstone of the pension reform drafted by the Prime Minister Petr Necas (Civic Democratic Party, ODS) centre-right coalition government (2010-2013).

The coalition will cancel the concept of super gross salary and solidarity surcharge for people with high incomes. Instead, it will introduce the second tax rate on individuals' incomes to neutralise the impact on the budget.

The minimum salary is to be increased to approach 40 percent of average salary.

The coalition will cancel the fees for prescription and visits to doctors and it will not reintroduce the fee for stay in hospital.

However, the fee for emergency care will be conserved.

The fall in revenues is to be compensated with growing resources from the state budget, especially by increasing the payment for the persons insured by the state.

Public investments are to go primarily to the insulation of buildings, retention of water in the landscape, transport and public infrastructure as well as social and health services reacting to population ageing.

The coalition plans to increase the resources of the State Fund for Transport Infrastructure (SFDI) to make its total resources approach 2 percent of GDP.

The government will only introduce the toll where it will serve some purpose.

The government will only agree with the completion of the Temelin nuclear power plant if it is economically advantageous for the Czech Republic. However, the coalition reckons with the Dukovany nuclear power plant to be operated even after 2025.

The government wants to preserve green diesel for farmers and to achieve self-sufficiency in basic foodstuffs.


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