"I'm sincerely sorry to inform you that your taxes will increase in the near future," stated Parliamentary Finance Committee head Marián Viskupič after the parliament greenlighted a €3.74 billion state budget hike on Friday.
Viskupič is a member of the Freedom and Solidarity party, which was the only one of the coalition partners not to vote for the hike. He emphasised that he perceived the need to adjust the budget, which is why SaS offered a compromise proposal and agreed with the items directly related to COVID-19. However, the party criticized the fact that the Parliament had dealt with the bill via a fast-tracked procedure, stating that it was passed without proper professional discussion. According to Viskupič, Slovakia's indebtedness has thus become enormous. "We'll all pay for it and not only us, but also our children and our grandchildren," he said.
On the other hand, Finance Minister Igor Matovič said that the hike was necessary due to the second wave of the pandemic. "The rescue mission was a success, people and businesses are free and will not be held hostage by one of the coalition parties," said the Finance Minister.
As for the issue of how he aims to consolidate the state budget debt, Matovic claimed he has discussed this with his counterparts in the EU as well as with representatives of the International Monetary Fund (IMF). The minister does not expect the debt to be consolidated next year, as it is more likely to take place in 2023. Viskupič reacted that 2023 is the pre-election year, when decreases in the budget are politically difficult to pass.
In line with the motion, the expenditures side of the budget will be hiked by €3.74 billion and thus reach €27.6 billion. The planned budget deficit will increase from less than €8.1 billion to as much as €11.8 billion. The so-called COVID-19 reserve will be enlarged by an additional €294.9 million, i.e. by €2.7 billion in total. Individual items in this category have been adjusted as well. An additional €1.04 billion will be earmarked for items in the budget. Expenditures to cover further measures should mainly create room for processes related to drawing money from the Recovery and Resilience Plan, for increased contributions to the EU budget and hikes in the budgets of rail companies.
"I am not completely sure if politicians are aware of the risks which this step comes with. We are a small and vulnerable economy and cannot afford to have as big debt as France or Germany," warns Vladimír Baláž economist of the Slovak Academy of Sciences.
