2019-10-30
FOR Communication 31/2019: How Seriously Does the Government Treat Taxpayers and the Expenditure Rule?
Instead of bypassing the rule and increasing the debt or reaching into the taxpayer's pockets, the Law and Justice party should verify the economic sense of its own election promises, while at the same time looking for savings on the expenditure side.
- After the election campaign, the Law and Justice Party stopped pretending that the 2020 budget would be deficit-free, starting a discussion on its amendment. The implementation of the new election promises will be difficult to reconcile with the existing spending rule, but there have already been voices offering it to be softened, such as Prof. Łukasz Hardt of the Monetary Policy Council.
- Manipulating the expenditure rule is a dangerous idea that undermines its meaning. Fiscal rules are supposed to limit the arbitrariness of politicians by preventing them from excessive growth in spending and debt, thus building the credibility of state policy. In the eyes of investors. A rule that is changed in a situation where it prevents politicians from spending more, ceases to function reliably.
Author:
Aleksander Łaszek, PhD, Chef Economist
[email protected]
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