Press Conferences

23. 5. 2007 11:38

Press conference of the Prime Minister of the Czech Republic, Mirek Topolánek after the meeting of the government held on Wednesday, 23rd May, 2007

Jana Bartošová, government spokesperson: Good afternoon, ladies and gentlemen, welcome to the press conference after the meeting of the government. I also welcome members of the government, the Prime Minister, Mr. Mirek Topolánek, the Minister of Finance, Mr. Miroslav Kalousek, the Minister of Health, Mr. Tomáš Julínek, and the Minister of Industry and Trade, Mr. Martin Říman. I give the floor to the Prime Minister now.

Mirek Topolánek, Prime Minister of the Czech Republic: I also welcome Martin Bursík.

Jana Bartošová, government spokesperson: I welcome the Deputy Prime Minister and the Minister of Environment, Mr. Martin Bursík, as well.

Mirek Topolánek, Prime Minister of the Czech Republic: As to the introduction, regarding those protagonists who should have been here, I excuse the absence of Pert Nečas. First of all I try myself to describe generally our results and then I will give the floor to the individual ministers who were concerned the most important points of the agenda. As an introduction I must say that concerning the news you are awaiting for, I mean the Bill on Stabilization of Public Budgets, the government approved this bill unanimously. The procedure and the respective details will be explained later on. Certain points were suspended rather because of technical reasons. As to those issues that we were approved, I would mention the Long-Term Plan for Education and the Development of the Education System. We were holding a long debate on the Report on Human Rights. I think we suspended that material in the end. We approved the Analysis of Pilot Projects of Private and Public Sectors, number of materials submitted by the Minister of Finance, we approved allocation of financial means for science and research for the following three years generally, and for the next year in detail, and as to those interesting issues, there was a debate on prolongation of mining activities in the mine Dolní Rožínka, and there was also a debate on over-limit reserves. You know well that we have to pay for activities of the previous government because of a Decision of the European Commission. We were talking about the concept of creation of state accounting system; we approved the Draft Plan of the Main River Basins and number of further issues. I am trying myself to mention the most important ones. Regarding the most significant issue, I mean the stabilization of public budgets, which is the first stage of the reform, it is necessary to say that there were no disagreements regarding the sphere of healthcare, which had been submitted by Tomáš Julínek and in the sphere of labour and social affairs submitted by Petr Nečas; these points had been approved at the last meeting. Regarding the sphere, which was submitted by Miroslav Kalousek, I would leave the explanation for him. We solved all problems, all disagreements. The thickness of the package, what a pity I do not have it with me, is about 14 – 15 cm and it has four associated resolutions, which are closely connected with this stabilization part of the reform. The first resolution concerns the debate on tax relies and deductible items. Here, there is unambiguous task for the Minister of Finance – to submit a new Act on Income Tax in the next year, whose part it will be of course solution of all those relieves and deductible items; it is a clear task, which is in fact a part of the second part of the reform, together with the implementation of the second part of the pension reform, introduction of the negative tax and such like. The other resolutions are also of executive character; they concern three laws on taxation of coal, natural gas and electricity. They concern the task for the Ministry of Labour and Social Affairs to prepare by June of the next year the revenue neutrality of this measure. Regarding those taxes, I will leave this issue to Miroslav Kalousek, so that he could describe our results. As to the important issues, I think that all the important ones have been mentioned. I will give the floor to my colleagues, now.

Jana Bartošová, government spokesperson: So, I give the floor to the Minister of Finance, Mr. Miroslav Kalousek.

Miroslav Kalousek, Minister of Finance: I will try to be brief. It did not concern disagreements; it rather concerned several possible variants. And I am glad that the government decided on the final variants today. As to the coal, gas and electricity taxes, the definite decision, which will be submitted by the government to the Chamber of Deputies, involves immunity for households regarding gas and immunity for cogeneration units regarding solid fuels; it will be applicable for household as well, in case of cogeneration units. There will be no immunity for households in case of solid fuels; there is still immunity for solid fuels in case of electricity production, because the electricity is taxed consecutively and therefore we do not apply double taxation; it means first to impose a tax for coal for electricity production and then for electricity. This is the definite proposal, which will be submitted to the Chamber of Deputies. The government also noted my audit concerning more than 100 exceptions – 77 tax immunities relating to the income tax of natural persons and 42 exceptions relating to legal entities, regarding which a great political and professional discussion had been held. We agreed that comments resulting from the professional discussion would not be included in an amendment of a law, but in a new Act on Income Tax, which had been preparing at the Ministry of Finance, so that it could come into force by 1st January 2010 at the latest. The government assigned me with a task to submit this law as early as in the next year. I suppose that it is all, as far as tax issues are concerned. As you learnt from media, a political agreement was reached regarding employee's preferential tickets for employees of public transport, on which the income tax would not be imposed; it was such a media topic. I respect this political agreement and I support it. I appreciated the Governor of the CNB (Czech National Bank) as he did not require any preferential banknotes for employees of the CNB.

Jana Bartošová, government spokesperson: Thank you and now the Deputy Prime Minister and the Minister of Environment has the floor.

Martin Bursík, Deputy Prime Minister and Minister of Environment: Good afternoon. I would like to finish the introductory word in which the Prime Minister mentioned four associated resolutions, but he was speaking only about two of them. The third resolution concerned the task for the Minister of Finance to address the European Commission and to submit a proposal for amendment of the customs tariff and to add one more code in it, which would comprise solid fuels made from vegetal biomass. Our will was to make biomass heating pellets advantageous, because it is a new technology and the European Commission do not know the code in the customs tariff; therefore it is necessary to create the code first, so that this fuel could be transferred to a group with lower VAT rate. And the Minister of Finance, on behalf of the Czech Republic, will ask for an exception as well, so that those technologies, which produce heat from renewable energy sources - solar collectors, heat exchangers, biomass boilers – could be transferred to lower VAT rate. The fourth resolution concerns a task for the Minister of Agriculture in cooperation with the Ministry of Environment, to work out a programme of the support of pure and high-percentage biofuels, which will have to be submitted to Brussels, as well. And to summarize the debate on the environmental tax reform, which is a part of the reform package, I cannot say anything else but that government reached a consensus concerning an exception in case of taxation of natural gas for heating of households, taxation of heat produced using by combined production of heat and electricity, taxation of heat from renewable energy sources, and there are certain other exceptions concerning railway and urban transport, which use electricity. Zero tax rates for compressed gas in the transport sphere will be preserved, as well. These were conclusions of the meeting of the government concerning the tax reform.

Jana Bartošová, government spokesperson: Thank you, I give the floor to the Minister of Health, Mr.Tomáš Julínek.

Tomáš Julínek, Minister of Health: Good afternoon. As the Prime Minister already said, the part of the reform that concerned healthcare rest unchanged, and it had been approved, in fact at the last meeting of the government. I want to emphasize that purpose of the proposal was to preserve at least two basic principles. The first one is the principle of strengthening of solidarity of healthy persons with sick persons. This is a principle, which means: let us pay extra money, let us pay fees for common care, for common treatment and let us save money from the public health insurance, so that we could use it for treatment of persons who suffers from serious diseases and thus to prevent them from being excluded from the system just because of shortage of money. And the second important principle is the stabilization effect. I cannot imagine a drop of money for healthcare in 2008. There must be stable situation here, as it is important for adoption of further reform laws that we expect for 2008. From this point of view, I am glad that the proposal was adopted with all those comments resulting from the last meeting of the government.

Jana Bartošová, government spokesperson: Thank you. Before continuation of our press conference, I must excuse the Prime Minister, Mr. Mirek Topolánek, who will start an official visit of the Hradec Králové Region. I apologize and I give the floor to the Minister of Industry and Trade, Mr. Martin Říman.

Martin Říman, Minister of Industry and Trade: Thank you, good afternoon. I will mention one point that I submitted. Following my proposal the government decided on prolongation of Uranium mining at the mine Dolní Rožínka in the Vysočina Region for indefinite period, or rather by the time mining was effective. It means that it will be done without any state subsidies.

Jana Bartošová, government spokesperson: Thank you. Now, there is time for your questions. The TV Nova, please.

Kamil Houska, TV Nova: If you allow, I have two questions. First I would like to know, Mr. Říman, because you said in the morning that you had a problem with favouritism of gas, and therefore I would like to know if you reconciled yourself with it, whether it was a great disappointment for you that a compromise had been reached. Then, I would like to know whether you will negotiate with the deputy Hovorka – it is a question to you – as he said yesterday that in case of approval of this variant, he would not support the reform. So, are you going to negotiate with him and to talk him round? And the last minor detail - you mentioned preferential tickets; had anything been changed regarding meal ticket? Because trade unionists had been talking about one package; did any change occurred? Thank you.

Martin Říman, Minister of Industry and Trade: So, I will start. It is very simple. Everybody had to give in and the result is as the Prime Minister stated – the government voted unanimously.

Miroslav Kalousek, Minister of Finance: Because the chairman of my political party is not present here, allow me to repeat my favourite sentence that the government is composed of three coalition subjects, it means three political parties, it is a matter of discussion in our political groups of deputies to take common attitudes to government's proposals, and Mr. Hovorka is a member of our group of deputies. Therefore, the Minister of Health will certainly go to see our group of deputies, but as to political discussion trying to generate our common standpoint, it is a matter of the KDU-CSL; the Green Party will have to find its standpoint as well as the ODS. I am an optimist in this respect. I made some comments regarding those preferential employee's tickets, because I knew that it was a media topic. Therefore I informed you on the agreement concluded between the Prime Minister and the Chairman of Railway Trade Unions. I repeat again that I respect this agreement and I support it. No other changes occurred regarding those media topics, i.e. immunities or deductible items.

Jana Bartošová, government spokesperson: The Minister of Health will add information.

Tomáš Julínek, Minister of Health: I would not say it better, so I have nothing to add to what the Minister of Finance has said.

Jana Bartošová, government spokesperson: Thank you, further question, please.

Jan Lopatka, Reuters: Good afternoon, I have a question to the Minister of Finance. When the government presented its reform for the first time, certain figures were stated regarding cuts in different areas than in mandatory expenditures, which would have to be reached. But there occurred certain changes since then. I would like to ask what are these figures like now, how much the government will have to economize both regarding mandatory and non-mandatory expenditures, so that it could reach the target concerning the deficit of public budgets. That was one question. Then, I have one more question, if I may, whether there is anything in the final proposal that tries to meet requirements of deputy Tlustý, or whether you try to meet his requirements by holding debates on those various exceptions relating to tax liability, which the Ministry of Finance is to submit next year. Thank you.

Miroslav Kalousek, Minister of Finance: Thank you for your question. These changes that occurred were not very dramatic, so figures, which were presented in the Jalta hotel, were still valid. Regarding approved changes in the legislative sphere, you use the word economize, I would rather say such an expression like lower expenditures or better balance in comparison with the autonomous state of no actions. So, in comparison with the autonomous state of no actions, the legislative will mean 32 billion crowns in that balance; in order to reach the deficit amounted to 3%, the government will have to economize further 15,5 billion crowns in the sphere of facultative expenditures in comparison with the medium-term outlook of 2006. As to the proposal of any deputy, I am ready to debate with any deputy. It is still valid that sentence I mentioned here a minute ago concerning the deputy Hovorka. The government is composed of three political subjects and I want, in the sphere I am responsible for, to know first what the programme and requirement of the ODS is.

Jana Bartošová, government spokesperson: Thank you, further question, Česká televize.

Daniel Takáč, ČT: Good afternoon. I would like the minister to specify it a little, after all. You know those proposals of Mr. Tlustý, they are quite concrete, and so could you say more concretely whether there are any of his ideas included in the reform. It is not only a general reservation, I do not like it.

Miroslav Kalousek, Minister of Finance: I think I remarked on the proposal quite above-board. You remarked them from the point of view of slogans, which accompanied the proposal; these were slogans all of us agree with; all of us wanted to simplify taxes, all of us wanted to support middle class. Nevertheless, if you study the proposal in a more detailed way, you find out that it would be a complication for the tax administration, that number of persons who would have to submit income tax statements would be dramatically increased in comparison with the existing state. It means that the proposal does not simplify the system, but it complicates situation of both citizens and the tax administration. The proposal, which should have supported the middle class, is a proposal that means, through tax abatements relating to children, the most dramatic tax increase for families with children since 1989. Not only in comparison with the proposal that is submitted by us, but even in comparison with the existing state; therefore I do not think that it supports the middle class. It concerns majority of families, not those with high incomes, of course. So, there is the principal contradiction between declared targets and the real content. If you ask me what I am most interested regarding that proposal, it is a very good idea of solution of depreciations using so called pool, which is in the proposal of the deputy Tlustý. This idea is very interesting and we are of course to include it into any amendment or into the new Act on Income Tax. It concerns relatively deeply debated issue of three depreciation groups – 50, 100, 200 months. I think it is a very good and interesting idea.

Jana Bartošová, government spokesperson: Thank you, further question. Does not anybody have a question? So, we thank you for your attention and good-bye.

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