The budget debate in the Sejm ran amazingly calm. The reaction of the financial markets was highly frugal, while the public did not respond at all. No wonder, numbers from a certain order of magnitude are completely incomprehensible for Poles.
For most of our countrymen, the amount of PLN 290 billion, for which this year's budget gap is as abstract as PLN 290 million and PLN 290 trillion. Then he's not. In addition, mainstream media communications have an inherent comment that these little than 300 billion are about 5.5% of GDP. 5 and a half percent isn't much.
However, if Poles showed these numbers in a different, more life-oriented way, good moods would rapidly fade. The task assumes that the gross of the budget will amount to almost PLN 632,85 billion next year. The budget expenditure is little than PLN 921.62 billion. Thus, the deficit is expected to amount to PLN 288.77 billion. That means that almost a 3rd of the money we're planning to spend must be borrowed. Do you imagine that in your home budgets, money runs out all 21st day of the month. From now on, you have nothing to do your regular errands and pay your bills for. It might last a period or two, but in the long run, you'd go with your bags. Of course, the state budget is importantly different from our home budgets. However, this does not change the general view. This is not the way of improvement – this is the way of bankruptcy.
Why is the task proposed by Donald Tusk's office so bad? The origin is simply a full mass, but 3 are essential.
A smiling coalition continues all the social programs of the Law and Justice, although it costs a lot. However, Tusk understands perfectly that any cuts, even if justified, would be fatally taken by the majority of society. And he doesn't want to, and he can't afford to, little than a year before the presidential election. If this election loses, which is not excluded at all, it will lose power very quickly. So the stakes are high.
At the same time, the government needs money to carry out its electoral promises. Better salaries in education were widely advocated and expected, but they are a concrete cost. Like little rational ideas. For example, the celebrated "grandmother" is PLN 8 billion a year.
To sum up, social expenditure in the economical crisis Tusk added more positions. They partially satisfy the expectations of the electorate, but they are besides a burden hard to bear by the budget in days of deconiecture.
Secondly, the Tusk government inherited from its predecessors blown to an unreliable level by military spending. Alliance commitments make it essential for our country to devote 2% of GDP to defence. In the next year's budget, however, this is expected to be respective times more than 4.7% of GDP. In absolute figures, it is 186 billion PLN 600 million. It is easy to address questions about the rationality of spending this amount with municipalities specified as “security has no price”. In the meantime, both the amount of expenditure and their intent are seriously doubtful in this case. Even more so, the acquisition of fresh weapons constitutes only the "top of the iceberg" as they make a fixed, advanced cost of operation and maintenance of combat efficiency. Thus, all euro spent in this year's budget will make a twelve or respective 100 cents of spending in each budget of the following years.
Thirdly, for 3 years Poland has taken the hazard of maintaining a fewer million Ukrainian “refugees” and de facto economical migrants. The amounts actually spent for this intent are hidden in various positions from education to wellness care. It is hard to accurately estimation what order of magnitude we are talking about, but it is surely respective or respective tens of billion PLN per year.
The budget for 2025 reflects the deficiency of work of Polish political elites for the state. It clearly dominates the cadential perception of reality and overriding current (including electoral) objectives over long-term objectives. Giant investments in defence are not an expression of a long-term strategy, but an accident of chaotic ad hoc purchases, under the force of American diplomacy. The scale of the budget gap of almost 1/3 of the planned expenditure is devastating. This is not the budget of a decently developing state. It's a budget of carefree bankruptcy.
Przemysław Piasta
In the photo: Andrzej Domanski, Minister of Finance (photo profile X of the Polish Parliament)
Think Poland, No. 43-44 (20-27.10.2024)
