Deputy PM: 2020 balanced govt budget may need revision

The government budget for 2020 may need revision if extra funding is not forthcoming from a rise in the social security contributions of higher earners, according to Deputy Prime Minister Jarosław Gowin.

Last week, Mr Gowin reiterated his opposition to government plans to remove the ceiling from social security contributions of the highest paid, which is thought to affect some 300,000-350,000 employees, most of whom are in the service sector.

Mr Gowin heads a faction of the ruling coalition, called Understanding, which gained 18 MPs and two senators in the parliamentary elections.

With Mr Gowin’s party voting against the social security move, its chances of passing through parliament would be slight, without support from the Leftists, who sit on the opposition. Mr Gowin says that without the additional revenue, it will be difficult to avoid a budget deficit, which he says could amount to PLN 5 bn (EUR 1.15 bn) unless the draft is significantly rewritten.

The reason behind removing the top limit for social security payments – aside from the additional revenue for the treasury – is, according to Prime Minister Mateusz Morawiecki, to level the playing field for taxpayers. Currently, lower earners have proportionately higher deductions all in, including social security and tax from their pay packets than the higher paid.

The current limit for income subject to social security payments is 30 times the average monthly salary, which currently stands at PLN 4,800 (EUR 1,120).

Finance Minister Jerzy Kwieciński told Polish Press Agency before the elections that it would not be very easy to reverse a change to the budget, especially an item like the social security change, which was “already presented to the European Commission”.