The elections are coming up in a few weeks, and as the South Moravian leader of the ČSSD, Roman Onderka, divulged, travelling around the region and attending campaign rallies will take up the majority of his time. And of course, he will be under a constant barrage of questions regarding the platform of the social-democratic party in many debates.
It feels like your platform has many points that would mean increased expenses for the state, whereas growth of income is not mentioned as often...
I do not feel that our platform is financially unbalanced. First of all, I would like to point out that our proposals are not as financially taxing as they may seem. The implications of our financial propositions are in fact minuscule when compared to the gaping hole left in the National Budget by the current coalition of ANO, ODS, SPD, and the Communists when they cancelled the so-called super-gross wage, totalling 130 billion Crowns.
Secondly, I am convinced that we can procure significantly higher sums for the Budget thanks to the Progressive Income Tax. Its progressive nature should impact incomes upwards of three times the average salary. Another thing is making the Business Tax progressive. Raising the tax on international corporations, large funds, and big companies, in general, would mean an additional increase in income. What is also worth mentioning is the tax on online companies and the tax on financial operations (Bank Tax). A higher real estate tax on owners who have three or more properties as well as a better approach to the taxation of Airbnb and similar platforms and the people using them for business are of high priority. After all, it has been confirmed by the courts that this activity must be treated as entrepreneurial and the correct taxation steps must be taken, which opens another avenue of raising funds for the Budget.
Thirdly, in opposition to this is the lowering of certain other taxes – the VAT on basic food items first and foremost. The Depreciation Policy reform can also be seen as a lowering of taxes, it should incite businesses to invest more funds. However, shortening depreciation timelines allows businesses to lower their tax base and therefore reduce the final tax paid. But you also achieve GDP growth because investments are one of its key components.
This brings us to the fourth point – economic growth is an important factor in managing debt. Those in a period of growth can deal with debt more efficiently than those in a depression, markedly so. I have to mention here that the pressure to redistribute wealth, provide higher pensions, raise the minimum wage and similar steps are pro-growth – by partially redirecting the flow of money to the lower and middle class, we best stimulate domestic consumption. And domestic consumption is another key component of GDP growth.
The fifth point is savings. Some money can be saved on the operations of government and state institutions, but truth be told it is not an infinite amount, and compared to the total debt it is not a substantial sum. That does not mean that steps towards savings should not be taken, however. A change in the Subsidy Policy is more important here. Let us stop funding those who do not need it. Let us stop financing toast bread production lines of the largest bakery in the country. Subsidies for large companies need to be cancelled, ended. Small- and medium-sized enterprises, as well as sole traders, are in need of assistance. We could cut expenses in the range of billions on large subsidy programs, and if we were to do a really thorough inventory, it could be in the lower tens of billions. That is a non-negligible amount of money.
If I take the proposed income increase as outlined in the social-democratic platform, even if I subtract the lower income from VAT on food items, and faster depreciation, and add economic growth and higher income from taxes on large capital and the rich, I see a realistic plan on how to control and finance the dynamically growing and dangerous national debt.
The ČSSD platform also includes points regarding affordable and social housing. All the parties have been talking about this issue for many years, but we have not seen any significant progress...
It is an extremely complicated and multi-faceted issue, so complicated in fact, that it would be very difficult to explain in just a few short sentences. We have been through a period of cheap money, very low inflation rates, and accessible loans. Savings and regular investments were not yielding a lot of interest. A big divide appeared between the money that was available and the ways one could invest it. And so the money, quite logically, flowed into real estate. This has been a trend all over the world, and it has been and continues to be a predominant one here in Czechia. It has lead to a dramatic increase in real estate prices. In parallel, the Airbnb phenomenon has developed alongside other platforms, allowing for short-term rentals with relatively high returns and no appropriate taxation. Let’s add to that the strange composition of our tax set-up with quite high consumption taxes as well as a considerable income tax, but minimal property taxation. And so, holding on to an unused property for future gain due to price increases is quite a cheap endeavor.
We must also account for the absolutely incomprehensible, complicated, and neverending construction approval process, which has had an impact on the supply side of things. This has given rise to a situation where you have a dynamic demand for apartments and real estate on one side, and a bottlenecked supply on the other. The result is clear.
Just as clear is the fact that the solution needs to be a structured one. It must include measures regarding property taxes as well as taxes on short-term rental businesses. This will free up apartments for long-term rentals and lower the need for new real estate. It is clear to see already that the Construction Act pushed through by the ANO and Minister Dostálová will not bring any solutions and will need to be remade from the bottom up. And our main vision is the mass construction of apartments on a state and municipal level for young families and seniors in all areas where it is needed. We feel that this is where the money saved on big businesses should flow and we want to at least double the supply of new apartments on the market in a short time span. This will pressure prices to decrease.
I am definitely not trying to say that this issue can be solved in a year or two, however. That is not the case. If a lot of hard work and effort is put into it, the next election term could see some tangible results in its last year or two.
The ČSSD is a part of the ruling coalition in this election term that is soon coming to an end. What have you – perhaps despite the ANO movement’s opinions – managed to push through? What would you say was a success that could be ascribed to the ČSSD in the past four years?
I can see many positive points, despite how difficult being in the government with ANO has been and how much it has cost our party. What we like to mention is that we managed to push through the first three days of sick leave being paid, despite ANO’s vigorous opposition. Imagine going into the period of the Covid pandemic without this measure! Many more people would have kept going to work even if they would feel the first signs of the virus. It would have spread much quicker and the impact would have been more disastrous. We have also managed to increase the minimum wage and thus create pressure on all wages to rise as a result. This was not well received by ANO either, and that is a very diplomatic way of putting it. They were actually chewing their pencils in half with anger [laughs]. We managed to push through a number of funding increases for social services and senior care. This was also against the will of ANO. We curbed the pressure to privatize healthcare and the efforts to put stringent limits on its financing. Thank God, I add again, as we would have felt the impact of these actions during the pandemic in a devastating way. We also effected an increase in the wages of school workers and other public servants. Our party has made substantial changes to laws and has started battling debt slavery and distraint injustice. The resistance in this regard has been great and unforgiving, but I do not want to say that it came from the side of ANO. That would not be fair, even though the fantastical rhetoric of financial profiteers and debt lobbyists did echo in the lines of MP’s of our coalition partner to a certain degree. But we were in the same boat as a whole in regards to this issue. So we managed to ban child debt, simplify the debt relief process for seniors, and so on.
This Government’s term has been a constant clash inside our coalition, between us – representatives of the left side of the political spectrum – and ANO, representing the right. If I were to draw the bottom line of this cabinet, it would be slightly left-leaning, which I consider to be a success.
Roman Onderka (born November 11, 1965, in Brno) is an MP, Statutory Vice-Chair of the ČSSD, and former Mayor of Brno. He is also leading the ČSSD ticket in the region of South Moravia for the upcoming parliamentary elections.
He working as a mechanic in the Adamov machine-works, he went on to become a Czech Railways train inspector. Onderka then started working in unions.
He completed his university studies later in life, in the year 2009 he graduated from the Karel Engliš College in the Economics and Management program, specializing in Economics and Business Law. In 2010, he also earned his MBA at the BUT (Brno University of Technology), validated by Nottingham Trent University.
Onderka started his political career in 2002 as a representative of the Brno – Starý Lískovec city district and has been a representative of Brno from that same year until 2018. He was a councilman from 2002-2006 and the Mayor from November 2006 to November 2014. In October 2017, he was successful in the parliamentary elections and became an MP.
He has held the position of vice-chair of the ČSSD two separate times.. He was later elected Statutory Vice-Chair.
He has been married twice, each marriage resulting in one son.
Moravia in his heart
Roman Onderka has adorned his facebook wall with the slogan, "You are in my heart, South Moravia." Which places would he recommend to a visitor? "I suppose that depends on the personal preferences of each individual. South Moravia has it all. Except for the sea, of course. But we have the Nové Mlýny reservoir to make up for that. Just to list a few more: Moravian Tuscany, walks through the Bohemian-Moravian Highlands, the wine trails, and wine cellar lanes most of all, an array of sights ranging from the Valtice and Lednice chateaus to the Cimburk castle ruins. And you must not forget the functionalist city of Brno.."
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