Report titled “Budget SOS” is – as representatives of both foundations emphasized – cross-party in nature and is an attempt to develop long-term recommendations stabilizing the state's budget situation. The document provides for two reform options: “mild” and “spicy”differing in the scale and pace of proposed changes.
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Economists want to save public finances. In his sights are pensions and 800 plus
One of the key demands is limitation of the 800 plus program. FOR analyst Mateusz Michnik explains that the goal is to cover only the poorest households with the benefit. In the severe variant, the number of beneficiaries would be reduced by half. According to the calculations of the report's authors, this would bring savings of the order of magnitude PLN 13.4 billion in the mild variant and PLN 30 billion in the acute variant.
Another suggestion is abolition of the thirteenth pensionwhich Michnik described as a solution created mainly for electoral reasons. Such a change would give approx PLN 32 billion in savings. In the strict version, economists also propose: abolition of the fourteenth pensionalthough – as they point out – it has a certain redistributive aspect. In this case, the savings were estimated at PLN 12 billion.
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The authors of the report also postulate an introduction a uniform retirement age of 67 for women and men. According to economists, the current system is not only unequal, but also unfavorable for both sexes – men have to work longer and women receive lower pensions. Raising the retirement age would bring approx PLN 50 billion in savings.
Necessary changes in the public sector. There is a call for a return to privatization
The report also included proposals review of new social spendingsuch as the so-called grandmother's pension or widow's pension. In the severe case, economists encourage them to be limited. Additionally, they postulate freezing of the wage bill in the public sector. Together, these actions would bring savings of the order of magnitude over PLN 75 billion.
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There were also other demands liquidation of the state monopoly on gamblingwhich – according to the authors – could increase state revenues by approx PLN 519 millionand also widespread privatization. FOR and WEI economists propose the sale of all State Treasury companies, with the exception of strategic entities such as energy companies and Polska Grupa Zbrojeniowa. In their opinion, such privatization could bring from PLN 75 to even PLN 100 billion in savings.
Economists: it is necessary to change the constitutional debt limit
The report also contains a proposal temporary increase in the constitutional limit of public debt in relation to GDP to 80%. for a period of 10 years. This is – as the authors explain – to increase the transparency of public finances and ensure that all state expenses are included in the budget act.
According to FOR and WEI estimates, implementing the proposed changes in the mild variant would bring approx PLN 241.7 billion in savingswhile in the acute variant – over PLN 345 billion.
The Civic Development Forum was founded in 2007 by prof. Leszek Balcerowicz and – as he says – works to promote free market solutions. Warsaw Enterprise Institute is a think tank promoting the idea of economic freedom.
