Poland’s new PM reiterates populist spending pledges in inaugural speech

By bne IntelliNews November 18, 2015

The new prime minister of Poland, Beata Szydlo, confirmed during her inaugural speech on November 18 that the government will adjust the 2016 budget to raise the deficit in order to meet social spending pledges made by Law and Justice (PiS) during the election campaign.

The deficit will be hiked by PLN1bn-1.5bn (€230mn-350mn) the PM told parliament, confirming suggestions from the finance minister earlier in the week. The major promises that helped the party to victory in the October 25 vote include an expanded child benefit programme, an increased income tax threshold, and dropping retirement ages.

The child benefit programme is estimated to cost PLN16bn in 2016; the change to retirement ages will require an extra PLN40bn over the next four years, the PM said as she confirmed the government plans to push the measures through. Szydlo pledged PiS will fast track new taxes to on banks and retailers, as well as raise dividend income by PLN1bn, to help pay the tab.

The PM also said her government will plough PLN1tn into spurring economic growth. The plan would be based raising the role of investment in the economy, as Mateusz Morawiecki - the new minister of economic development - has called for. Szydlo did not specify where the PLN1tn would be found.

The PM’s speech lacked more details on issues that had starred in the party's campaign, including reform of the mining sector, Poland’s position on EU climate policy, or relations with Russia. More about the new government’s energy policy should be clear once a new ministry of energy has been established. 

Referring to recent terror attacks in Paris that shook the EU, Szydlo only said in general terms that “security of Poles” will be her priority, but failed to provide more details. Earlier this week, a PiS minister of European affairs told media Poland would not comply with the EU's programme of relocating refugees.

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