The draft budget for next year, approved this week by the Czech government, projects a deficit of some 2.3 percent of the country’s GDP. Government officials say the budget will allow for higher public investments and hikes in public sector salaries and pensions. But critics argue the budget is unambitious, and a missed opportunity to narrow the Czech public finance deficit at a time of an economic recovery.
The government has approved a 3.5 percent increase in the salaries of public employees, effective of November. Labour and Social Affairs Minister Michaela Marksová said the government had saved up around one billion crowns in this year’s budget which was enough to pay for the increase in November and December. The government was originally planning to raise the salaries in January. The wages of some 930,000 public sector employees such as teachers, health care workers, police officers, and others, will increase by an average 730 crowns a month.
In Business News this week: Czech central bank predicts labour market improvement; Czech Republic increasingly attractive for international manufacturers; car production up by 11 pct between January and September; railway operator ČD Cargo doubles profit but loses market share; and developer Orco leaves Prague stock exchange.
The centre-left government has approved an increase in the minimal monthly wage to 9,200 crowns starting next year. The minimal wage was upped by 700 crowns. The move was strongly advocated by Prime Minister Bohuslav Sobotka who argued that it was essential to motivate people to work rather than staying on the dole. The cabinet’s decision was unanimous despite opposition from employers. The minimal wage was last raised in August of 2013 by 500 crowns.
The national unemployment rate remained at 7.4 percent in August, the same figured registered in the third consecutive month, according to figures released by the country’s Labour Office on Monday. More than 535,000 jobs seekers were registered in that month. The jobless rate stagnated despite the fact that there were nearly 55,000 vacancies in August, some 14,000 more than in the same month previous year. The Labour Office expects that unemployment levels will stagnate or rise slightly in the coming months due to the arrivals of graduates to the labour market and the end of seasonal labour.
Government officials, trade union leaders and employers have failed to agree on a hike of minimal wage by CZK 700. Employers have opposed the Social Democratic proposal, arguing that the government and trade unions had previously agreed to a CZK 500 rise from the present 8,500 crowns to 9,000, starting from January 2015. Prime Minister Sobotka said the decision about the minimal wage was up to the government.
The Social Affairs and Labour Ministry is drafting a proposed amendment to the law which should help the parents of twins, triplets and other multiples who are financially disadvantaged under the present system of state aid. Under the proposal the state would cover the expenses for a nanny and increase the one-off state bonus for the birth of two or more children. According to Social Affairs Minister Michaela Marksová Tominová it is unfair and illogical that the parents of more children from one birth are financially worse off than parents who have the same number of children in succession. The problem was highlighted in particular with the birth of quintuplets to a Czech mother last year.
Employees at the country’s highly-respected National Theatre can expect a little extra next year when it comes to their monthly paychecks. Funds, allowing for a salary rise for the institution’s employees, were agreed recently by the country’s finance minister, Andrej Babiš, and Culture Minister Daniel Herman. At the same time, it is clear that salary bump, long-term, is being seen as not enough.
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