Zbyněk Stanjura has been in high politics for fourteen years, serving as an MP for the ODS. This is his second time in government; the first time was nearly ten years ago as minister of transport. He took on the challenging role of finance minister in December 2021, when Petr Fiala’s government was sworn in. His main task is to restore public finances.
The implementation of the national budget plan from January to May showed a year-on-year deficit reduction of 61 billion crowns. What was the main driver?
We can look at this year‘s budget from several perspectives, and the 61 billion, which was the reduction of the deficit five months into this year compared to the last, is the result of several factors. Primarily, stronger tax revenues, which is a combination of the recovery in domestic consumption affecting VAT collection, wage growth, and income tax measures from the consolidation package. On the side of expenses, it is thanks to the stabilization of energy prices; state spending on helping households and businesses with high electricity and gas bills has decreased significantly.
In terms of expenses, whether increases or decreases, where did we see deviations from the standard development of the year prior?
We observed several significant deviations in terms of expenditures. Social benefit expenditures increased after the valorization of pensions and other social security measures due to last year‘s high inflation. Fortunately, this episode is behind us now, and inflation is back at values slightly above two percent. Savings in state administration operating expenses are another major item. We also see a decrease in expenditures on infrastructure investments, but this is only a temporary phenomenon. It was partly caused by delays in some projects, but also by the fact that investment expenditures are stronger in the second half of the year. This government is definitely not cutting back on investments.
Regarding the increase in public health insurance payments for state-insured individuals – isn‘t strengthening the healthcare system with higher contributions just a band-aid that doesn‘t address the core problem of the sector? Where are the additional funds allocated specifically?
Yes, I see the increase in payments for state-insured individuals as one of the steps to strengthen the financing of the healthcare system. However, it is necessary to realize that merely increasing contributions is not a panacea and is only a partial solution. The key is to focus on systemic changes that will improve the efficiency and quality of healthcare. The additional funds collected for the healthcare system are primarily directed towards acute care, prevention, and the modernization of hospitals, according to information from the Ministry of Health. Detailed information on the allocation of funds in the field of healthcare and medical care could most certainly be provided by my fellow cabinet member Vlastimil Válek.
Which measures from the consolidation package that are expected to positively impact the balance in future periods have not yet been implemented in the first five months of this year?
Some measures of the consolidation package have not yet been fully or even partially implemented, but we expect their positive impact in the coming period. These include planned adjustments in the tax system starting this year, which will bring higher revenues to the national budget next year – for example, the increase in the corporate income tax rate or the further gradual increase in excise taxes on vices such as tobacco and alcohol. However, if we want to convince citizens that we are serious about reducing the pace of the country‘s indebtedness, I consider it our duty to start with ourselves, meaning saving on state expenditures. This year, we will save over twenty billion on operations and government wages, and we have also cut tens of billions in national subsidies. These, in my opinion, only distort the market, and many companies have turned them into a bonafide subsidy business, as confirmed by reports from the Supreme Audit Office.
In one of your interviews, you mentioned that healthy public finances are important for low-income subgroups. Could we call public finances healthy at the moment, or are we at least on the right path to a recovery?
It‘s good to remember that after Andrej Babiš‘s government, we took over public finances that were in disarray with a deficit exceeding five percent of GDP and a leading pace of debt growth among EU member states. Therefore, our clear task was and remains to be fixing the budget. And after navigating two turbulent years with the war in Ukraine and high energy prices, now is the right time to get Czechia back in shape. Public finances are not yet completely healthy, but we are on the right path to stabilizing them. I know these are often unpopular steps for the public, but I believe people will understand the severity of the situation. Our country simply cannot continue burdening future generations with debt, as the opposition tries to make the public believe. The consolidation package contains a number of measures that are strict and necessary to ensure that we can make public finances sustainable. You mention concerns about whether the package was sufficient, whether we will ultimately deliver the recovery of public finances. It's obviously a long haul, and we must not slack off.
A major topic is also affordable rental housing, a joint project of the ministries of finance and regional development. The state has provided about two hundred plots of land for the construction of apartments, and financial resources amounting to eight billion crowns will be released from the National Recovery Plan – when will the first rental housing actually be available, and who will set the rent rates and how will they do so?
The first rental housing should be available in two years, around 2026. The roughly two hundred plots for the construction of affordable rental housing that you mention were identified last year during an extensive inventory of state property. The state assessed them as suitable in terms of size and location. Municipalities that want to participate in the affordable housing project now have the opportunity to apply for a free transfer of land and choose the financial model they will use for the construction of affordable housing. For two years, we have been hard at work, looking for ways to foster cooperation between the private and public sectors. There will be four possible models of affordable housing support available. The rental prices should be below ninety percent of market rates common in the area at any given time. The Ministry of Finance has developed a price map of rent market rates, which is available on our website and will be updated twice a year.
Whom is affordable rental housing intended for?
It will be available to several population subgroups, with the final decision always resting with the specific municipality. One municipality may prefer teachers, another nurses or police officers, and so on. I believe that in the future, projects worth tens of billions of crowns can be realized in this way. Hand in hand with this, the loan capacity of the National Development Bank should gradually increase.
What other legislative changes or projects would you like to implement during your tenure at the Ministry of Finance before the next election?
After adopting the fiscal package, I stated that the Ministry of Finance would not come out with any changes of similar magnitude. The media distorted my words, saying that the government would do nothing until the end of the election term. I repeat, and I hope it will not be misinterpreted again, that the Ministry of Finance will not come out with similarly extensive changes to what the recovery package brought until the end of the election period. But that does not mean that we‘re shutting down the Ministry of Finance and going on vacation. We are working on a number of other legislative proposals, whether it is the Accounting Act or the National Development Bank Act, which aims to be a significant driver of economic growth in the Czech Republic. So, my colleagues and I still have plenty of work to do.
CV BOX
Zbyněk Stanjura (born February 15, 1964, in Opava) is the current minister of finance, chairman of the ODS parliamentary group, and the first vice-chair of the party.
He graduated from the Faculty of Electrical Engineering and Communication Technology at Brno University of Technology, majoring in Electronic Computers. After the fall of communism, he founded a company with several classmates, where he worked as a programmer and director for eleven years.
He became a member of ODS in 1991. He was an Opava municipal assembly member for 11 years, led ODS in municipal elections four times, and was the mayor of Opava for eight years. He was elected to the Moravian-Silesian Regional Assembly three times and served there for a total of 11 years.
He has been a member of parliament since 2010 and led the Ministry of Transport for a little under a year in 2012.
Stanjura is married, childless. He speaks English and unwinds by traveling, reading, and doing sports, and can often be seen inline skating, biking, or out on a walk.
