New Polish government updates budget with election promises, including 30% raise for teachers

The new Polish government has adopted an amended draft budget for 2024, which assumes an 11% higher deficit than planned by the previous Law and Justice (PiS) administration.

The new spending plans, unveiled by Prime Minister Donald Tusk and finance minister Andrzej Domański on Tuesday, maintain key PiS programmes, including the former government’s flagship child-benefit scheme. But funding for public media has been scrapped.

Additionally, the draft budget includes funds earmarked for some of the new governing coalition’s pre-election promises, such as pay raises of 30% for teachers and 20% for other government employees.

“What was most important to us was to provide money in the state budget for 2024 for expenses that fulfil obligations to millions of Poles,” said Tusk, whose government was sworn into office a week ago. The budget must now be approved by the parliament and signed by the president.

Premier @DonaldTusk podczas konferencji prasowej z ministrem @MF_GOV_PL @Domanski_Andrz w #KPRM: W budżecie na rok 2024 zapewniamy podwyższenie średnich wynagrodzeń nauczycieli o 30%, a naczycieli początkujących o 33%. pic.twitter.com/D1JAsmgzoY

— Kancelaria Premiera (@PremierRP) December 19, 2023

The new government assumes that the state’s expenditures will amount next year to 866 billion zloty (€199.82 billion), compared to 849.3 billion (€196.01 billion) planned by PiS. Revenues will amount to 682 billion zloty (€157.37 billion), compared to 684.5 billion (€157.95 billion) planned by PiS.

This increased spending means that the budget deficit will be 184 billion zloty (€42.46 billion) next year, against 164.8 billion (€38.03 billion) planned by PiS.

Domański assured, however, that the new government will conduct a thorough audit of all ministries in the coming weeks to look for some “natural savings” and “will strive to reduce the deficit in the coming years”.

Parliament has voted to extend energy price freezes for households, local authorities, small businesses and farmers to mid-2024.

The outgoing PiS government wanted a full-year extension, but the incoming ruling coalition pushed through a six-month package https://t.co/wu05R8eQNL

— Notes from Poland 🇵🇱 (@notesfrompoland) December 8, 2023

Tusk confirmed that PiS’s child-benefit programme, which is being raised to 800 zloty per child per month, will be maintained, as will the additional pension payments for pensioners promised by the former government.

“There is financing for 800+…and the 13th and 14th pensions will be paid,” he said. “We are [also] providing an increase in salaries, including a 20% increase of base amounts for all state employees.”

In the case of teachers, their average salaries will go up in most cases by 30%, and by 33% for the lowest-paid and new teachers.

Teachers in Poland are among the lowest paid in the EU, even when adjusted for the cost of living, new data show.

Both starting salaries and those at the top of the pay scale are in the EU’s bottom four.

For more, see our report: https://t.co/ADlPQ1DFPi pic.twitter.com/1bsVdOqP6R

— Notes from Poland 🇵🇱 (@notesfrompoland) October 12, 2022

The budget also earmarks 500 million zloty (€115.39 million) for the newly restored IVF programme and 10 million zloty (€2.31 million) for initiatives such as a helpline for children and youth. Funding for both had been withdrawn under PiS.

Funds have also been secured for a planned programme offering women who decide to return to work early from maternity leave a monthly payment of 1,500 zloty (€346.17), dubbed “granny payments” (babciowe) as grandmothers often care for children while mothers work.

The budget does not include funds for the public media, which during its time in power PiS turned into a party mouthpiece. Tusk said yesterday that the government is only “prepared to subsidise the public media after the situation there is amended”.

Mothers who return to work after maternity leave would get 1500zl (€320) a month from the state under a policy proposed by Poland’s main opposition party

They call the idea “granny payments” because grandmothers often care for children while mothers work https://t.co/wGW9tV2nz6

— Notes from Poland 🇵🇱 (@notesfrompoland) March 24, 2023

Domański noted that Poland’s borrowing needs will reach 250 billion zloty, while the general government deficit, the measure used by the European Union, which includes local government spending, will be at 5.1% of GDP.

“This means that we are consistent with the minimum fiscal effort recommended by the European Commission,” he said.

The changes to the budget were, however, criticised by the former prime minister of the PiS government, Mateusz Morawiecki, who noted that the new government has only frozen energy prices for households for the first half of the year, not all of 2024 as PiS wanted.

“It’s a two-pocket budget: they put in one and take out the other. They give to a few and take from all,” wrote Morawiecki.

He also accused the new government of hypocrisy, pointing out that when it was in opposition, it repeatedly accused PiS of indebting the country. “Now a deficit of more than 184 billion zloty is no longer a problem. Hypocrisy has reached the heights of the Himalayas,” he wrote.

To budżet dwóch kieszeni. Do jednej wkładają, a z drugiej wyciągają. Wkładają nielicznym, a wyciągają wszystkim.

Kilkanaście procent polskich pracowników ma dostać podwyżki do jednej kieszeni, a z drugiej – już wszystkim Polakom – wyciągnięte zostaną pieniądze poprzez m. in.…

— Mateusz Morawiecki (@MorawieckiM) December 19, 2023

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Main image credit: Krystian Maj / KPRM (under CC BY-NC-ND 3.0 PL)