Polska Polska
7 tysięcy firm, blisko 3 miliony zatrudnionych
Tabs 1

Search

Main page News
Tabs 2

LMC

Legislation Monitoring Centre
 
In Poland there is neither an internet portal nor an institution for employers responsible for monitoring the legislation process of regulations that determine the rules for business activity. At present employers  learn about changes in the law mainly from mass media or simply through the grapevine, usually with delay.

News

print

How were the costs of the promises of candidates for president calculated and how could they be financed?

22-05-2015

We present the costs of promises made by candidates for president of Poland. They were made from the perspective of public finances –which is why they do not include a.o. the estimated costs of changing the currency of denominated CHF loans.

 

Estimated costs of candidates declarations

 

Increased public finance sector spending

Andrzej Duda

Bronisław Komorowski

500 zł for a child

120 bln PLN

“First job” program

13.5 bln PLN

Free kindergartens

20 bln PLN

Care voucher

6 bln PLN

Lower pension age

53.6 bln PLN

   

Total

193.6 bln PLN

Total

19.5 bln PLN

 

Decreased income for the public finance sector

Andrzej Duda

Bronisław Komorowski

Increasing the tax-free income tax threshold to 8 000 PLN

80 bln PLN

Innovation support porgram

15 bln PLN

Lower pension age

17.8 bln PLN

   

Total

97.8 bln PLN

Total

15 bln PLN

 

 

Total costs of election promises from a public finance perspective

Andrzej Duda

291.4 bln PLN

Bronisław Komorowski

34.5 bln PLN

 

500 PLN for second and further child (and the first child in a poor family)

 

As Andrzej Duda’s interview with „Rzeczpospolita” shows, the costs of the program is estimated by its authors at  ca. 24 bln PLN per year, which would give a total of 120 bln PLN by 2020. (Source

 

Free kindergartens

As shown by data provided by the Ministry of Education, in 2014 74 percent of kids aged 3 to 5 are going to kindergarten. GUS figures for 2013 indicate that gmina spendings on kindergarten were 7.7 bln PLN. Considering that in order for the accessibility of kindergartens to be increased, parents’ involvement in their financing (now ca. 12 percent) would have to be restricted, it can be estimated that the cost of free kindergartens would be ca. 4 bln PLN a year (a total of 20 bln PLN by 2020).

 

Increasing the tax threshold to 8 000 PLN

The tax reduction vale is currently 556.02 PLN. If the tax threshold were to be increased to 8000 PLN, this value would rise to 1440 PLN. As shown by data presented by the Ministry of Finance for 2013 PIT, 23.1 bln taxpayers taxed with the tax scale reported income. That would mean that the maximum decrease in budgetary oncome generated by income tax for physical persons would be 20.4 PLN. Considering that only a part of taxpayers report an income of 8 000 or more, the direct cost of this solution can be estimated at 80 bln PLN by 2020.

 

Lower pension age

The estimation is based on research entitled Estimation of non-financial obligations in the pension system in 2015-2020, conducted at the Warsaw of School of Economics. The financial consequences of lowering the pension age to 60 for women and 65 for men were investigated. Short-term costs of reversing the changes from 2012 would be relatively low, but they would increase significantly each year. The cost by 2020 would be 53.6 bln PLN, while a total value of losses in pension contribution income would be 17.8 bln PLN, so the total costs of such a reversal for public finances would be 71.4 bln PLN.

 

Care voucher

Assuming that faimilies would receive care vouchers for 200 000 kids (ca. 25 percent of 3 and 4-year olds) of 500 PLN a month, the estimated cost of the solution would be  1.2 bln PLN per year (6 bln PLN in total by 2020)

 

“First job” program

Information presented by Minister of labour Władysław Kosiniak-Kamysz, the cost would be ca. 2.7 bln PLN a year (a total of 13.5 bln PLN by 2020)

 

Support for innovation

Assuming that the program brings the expected results and a dynamic increase of companies’ spendings on research and development occurs and venture capital activity develops, the total decrease in income form income tax for legal persons should be 15 bln PLN by 2020 at most/

 

Potential sources of financing for the realization of promises

Andrzej Duda stated that the way to finance his promises would be to tax companies who move their profits abroad – such as banks and supermarket chains. As details were not presented, it is hard to estimate what the income generated in this way would be. However, one can assume that solutions will be similar to those applied by Viktor Orbán in Hungary.

 

If that were the case,  annual income from the bank tax would be ca.7.7 bln PLN ( a total of 38.5 bln PLN by 2020) and 1.9 bln PLN per year  (9.5 bln PLN in total by 2020) from the supermarket tax. Thus, another 243.4 bln PLN would be needed by 2020 to finance the promised changes.