She is one of the most prominent people in the ANO movement. Minister of Finance, Alena Schillerová, has given us an interview at the end of her election term, in which she hides nothing, and is very open and honest. She lets the numbers do the talking.
The elections are coming up in a few weeks, meaning that the current government's term will soon conclude. Now is a good time to draw the bottom line. What was your big success as Minister of Finance? And what were the failures?
It is always difficult to make a list of successful projects. Sole traders will see different positives than employees, and the management board of a big PLC will see others yet. I have had overwhelmingly positive feedback from sole traders regarding the lump-sum tax, which allows them to take care of all their tax obligations with one payment. Over 80 thousand small-sized entrepreneurs are currently making use of it, allowing them to reduce their administrative burden and rid themselves of a lot of stress, which is very nice. I am happy to see the interest in flat-rate meal tickets, which will provide subsidized meals for up to a million employees. Speaking of employees, I have to mention decreased taxes thanks to the abolishment of the super-gross wage. People have higher wages as a result, and the money is already having a visible effect in the economy. What is unfortunate, on the other hand, is the fact that we did not manage to push through the Digital Tax in the Chamber, despite the Ministry of Finance's very thorough work on the bill, and its good overall reception in the international press.
You will be leading the ANO ticket in the South Moravian Region in the upcoming elections. A very difficult position seeing as ANO's good name here suffered quite a bit due to the affair surrounding Mr. Švachula. How do you plan to convince the South Moravians to vote for your party?
If you look at the current candidates for the ANO movement in the South Moravian Region, you will see that the entire organization has gone through a great deal of self-reflection. This was also my condition as the ticket leader. The ANO movement is a guarantee of stability, low taxes, continuously increasing living standards, fairly graduated pensions, and healthy public finances. I, as well as Andrej Babiš during his time as Minister of Finance, have proven in the past that we know how to decrease the national debt. The numbers speak for themselves. Prior to Covid, our budget was operating at an even balance or even a surplus. We will make our way back to that. Not thanks to cuts, but thanks to investments. Investments into the people, into their future, into a better Czechia overall. That is our plan.
Listening to you and Prime Minister Babiš, I often feel like you two are synchronized in some way. Why is that? Have you ever had a fundamental work-related conflict with him?
You might be surprised. I would say that out of all the members of the Government, or at least those that are part of ANO, I am the one who gets into conflict with the Prime Minister the most. Believe me that I would lose his respect if I did not have an opinion of my own. If I were to be specific, I disagreed with certain expenses as part of the budget deficit increase. We have talked at length every year about discounted public transportation fare for students. Currently, we are in disagreement regarding pay raises for the upcoming year. I am convinced that lower taxes combined with increased employee retention credit have been more than enough to make up for inflation, which is why there is no need to put further strain on the budget through flat-rate pay raises.
As of July 2021, the National Budget's deficit was 279 billion CZK. The budget has been approved for the entirety of this year with a deficit of 390 billion. There has been a lot of criticism from the opposition, as well as from independent economists. The argument they make is that we simply cannot afford such a deficit. Or can we?
Speaking about things like the deficit or debt, there are no stronger arguments than numbers. Let me point out the most important ones. In 2013, when the Ministry was in the hands of the current opposition, the national debt was equal to 44,4% of the GDP. And prior to the pandemic, at the beginning of 2020, it was 30% of the GDP. So the decrease of the debt from 44,4% to 30% happened during the terms of ministers of finance coming from ANO. And what happened next? Due to Covid, we supported the economy by providing 550 billion Crowns. We could afford it. Now the debt is 43,5% of the GDP. Let's sum up. After injecting 550 billion into the economy, lowering taxes by 510 billion, increasing wages, pensions, investing in the army, security corps, and healthcare, our nation's debt is still lower than it was in 2013, when the finances were handled by the current right-wing. And it is this number, 43,5%, that, according to the latest figures from the Eurostat, ranks Czechia as sixth on the list of indebtedness of EU countries. Our debt is far below the European average.
Recently, you have introduced a plan to consolidate public finances. What does it consist of? Where can funds be saved?
I feel that consolidating 40-45 billion a year is a reasonable rate. That, plus EU funds, would put us on the road to reach a balanced budget in about seven years. The correct way to consolidate public finances is proper tax collection and fighting tax evasion and fraud. Definitely not increasing taxes. That is why we implemented VAT control statements, the “Tax Cobra”, or the ESR (Electronic Sales Records), that is why we are focusing on transfer pricing. And that is exactly why we have to bring the ESR back after the crisis. And of course, there will have to be a complex revision of the tax mix, as well as a change in the taxation of global businesses. I will also continue limiting tax exemptions, which was an area where I managed to make cuts worth 12 billion Crowns.
Despite the fact that increasing living standards for seniors was one of this government's priorities, many economists and political scientists say that a pension increase of this kind is a hazard, and the funds to pay for it are just not there. And also that it is a populistic gesture, meant to garner voter support for the ANO movement. What would you say to that?
Whether people like it or not, increasing living standards for seniors is a long-term priority of this government. The main goal of helping seniors last year was to keep their living standards level during the crisis. To make sure that it was not the seniors who would come out on the other end of the pandemic defeated. In 2021, the consumer price index for seniors actually increased by half a percent more than common inflation. That is one of the reasons why we gave them a 5000 CZK subsidy to their pensions, on top of the lawful graduation. I refuse to acknowledge the connection between keeping the current senior's living standards and stealing from future seniors. Our social security is gradual and represents the best possible pension stability for current as well as future seniors. It is a system that is fully integrated into the national budget, where pensions are treated as a mandatory expense. Simply put, it means that the government guarantees the people's pensions. Yes, we will not be able to put together a pension reform by the end of this term. Let's admit, though, that no government has managed to do that in the past 30 years. It requires a consensus across the political spectrum, in order to avoid the next elections being won by someone who will cancel it right away. And that is a comfort that we simply did not have during the pandemic. I will point out, however, that the future government will not have to start from the ground up in terms of the Pension Reform. We have prepared a solid base to build upon in the form of an analysis from the OECD that provides a complex overview of our social security system as well as a number of expert opinions from this independent authority. Most of them are not exactly surprising. The way our pensions are calculated is very complicated, and we need to assure the financial sustainability of the system by adjusting the tax mix. Of course, we do not want the tax burden on employees, sole traders, or companies to increase too much as a consequence. And we want to keep being a country that is able to compete and attract investors.
Which of your personality traits do you appreciate the most? And what quality (qualities) could you do without?
I have devoted my entire professional life to the service of the State, and nothing has changed in that regard. I worked in Financial Administration for many years. When I received the offer from Andrej Babiš to become his deputy, and later the Minister of Finance, it was the logical way forward in my career, an enormous challenge as well as a responsibility, though. And last but not least, the desire to make a change. I believe myself to be hard-working and focused, but I can sometimes be impatient and overly pedantic.
I truly admire your ability to communicate in a matter-of-fact and civil manner, in televised debates for instance. Is this a God-given ability, so to speak, or have you had media training?
Everyone entering politics has to be aware that they will be seen and will have to communicate on a regular basis. And that is the way I look at things, it is a part of my job. I like speaking to people and sharing my opinions, it energizes me. True, it was not easy at the beginning. Although, things were a bit easier for me as I did work as the Deputy Minister of Finance, which is a position that the media also take interest in. On the other hand, reading about myself on the internet and in the newspaper, seeing myself on TV, that was something completely new to me. So I am quite proud of handling this without any kind of special media training. And thank you for the compliment.
Alena Schillerová, J.D., Ph.D. (born March 18, 1964, in Brno) is an attorney, economist, and politician. She is currently working as the Minister of Finance (for ANO) and Deputy Prime Minister.
She graduated in law from the Masaryk University, Brno, and earned her doctorate in Administrative law there as well.
Between 1991 and 2012, she worked at the Brno-Country Financial Office. From July 2014 to September 2015, she held the position of Director of the Legal and Tax Process Section at the General Financial Directorate. She was the Deputy Minister of Finance for Taxes and Customs from January 2016 to December 2017. In December 2017, she was appointed as the Minister of Finance, and in April 2019, the Deputy Prime Minister.
She is married, her husband, Jaroslav Schiller, is an entrepreneur, who owns a wholesale office supplies business. They have raised two children – daughter Petra, who has a family of her own, and son Jaroslav.
Women in Czech politics
“Having an example is important. I feel that if women see other successful women in politics, they will feel empowered to get into the field as well. And the only way we can achieve that is through women being more engaged and actually going into politics,” says Alena Schillerová. “The ANO movement, for instance, very much supports women in politics. Three out of the four female ministers in the Government are part of the ANO movement. There are female politicians on the boards of representatives across regions and municipalities, even in the European Union. Just a few weeks ago, I had a very inspiring meeting with a hopeful young lady who is a member of the Young ANO movement. She came up with an idea to create a platform that would bring more women into politics. And those are the kinds of ideas I can get behind.”
Alena Schillerová is the ANO ticket leader in the South Moravian region. This was her welcome in Kyjov.
She is not afraid to walk among the common people. “I like talking to people and sharing my opinions, it energizes me,” says the Minister.
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