Receipt from the state 2012

End of April is the period of the income tax settlement in Poland. The Civil Development Forum took it as a good opportunity to show Poles how much money the Polish state spends and on what are they spent.  It is definitely not a small amount; in the 2012 alone spendings of the state  oscillated around the sum of 680 bln PLN, and speaking more lucidly 18,261 PLN per person. The second issue of the Receipt from the state, prepared by the Civil Development Forum shows how this amount was spent.

It is always important to remind that public spendings comprise not only those governmental but also those made by local authorities, self-governments, National Healthcare Found (NFZ), public retirement funds and other public institutions. 

By the end of April some of the public institutions still have not published their detailed financial reports for the year 2012, and therefore, our calculation should be treated as approximate. They are designed to present the scale of particular spendings per capita. The idea of the Receipt from the state was invented in Slovakia, where it is the flagship project of the INESS think-tank  (In Poland similar calculations are carried out also by the Globalization Institute).

According to the initial calculations, the receipt in 2012 was 436 PLN (2.5%) higher than in the year 2011. However, taking into consideration the high inflation rate (3.7%) it can be stated that the receipt diminished. What is more, if we take into account the economic growth (4.3%) we will  see that the real level of public spending went down from 43.6% to 42.8% of the GDP.  Such development should be welcomed because excessive public spendings are harmful to the economy. Despite the decline, we cannot forget that the level of 42.8% of the GDP is still quite high, given the level of development of Poland.

Despite the common believe, the highest spending are not connected with the administration, but with the retirement system. In the year 2011 every Polish citizen spent  on average 3111 PLN on pensions, including 2521 PLN on the Social Insurance Institution (general system), 298 PLN on the Agricultural Social Insurance Fund and 314 PLN for pensions of judges, prosecutors, policemen, soldiers. Further 1393 PLN were spent on various supplements, benefits, and early retirement. The spendings on pensions and early pensions constituted one fourth of the whole public spendings in 2012. The negative impact of this group of spendings could be alleviated be important reforms such as the increase of the retirement age. In addition, the system of disability pensions remains  unadjusted to the general retirement system, creating incentivizes to seek disability pension rather than old-age pension.

The spending for the health care reached in 2012 the total amount of 1939 PLN per person, it is, however, disputable, whether Poles receive good quality for such amount. 607 PLN was invested in highways and expressways  and local authorities spent further 734 PLN on the local transport and roads. In this group of spending the decline in compare with the year 2012 was very noticeable (129 PLN less per person and 5 bln PLN in total)

The public administration in responsible for only 5% of the national spending. It seems that this is rather the efficiency and the work ethic what should improved, rather than the general cost. If every second civil servant were made redundant, it would lead only to the decrease of 2,5% of total spendings.  Therefore, we should not trust politicians who propose to reduce public administration in lieu of other reforms because the potential benefit from such an action would be too small to resolve the most important problems of the Polish public finances.

Less significant positions on our receipt are social benefits (614 PLN), environment protection (281 PLN), sport and recreation (244PLN), culture (280 PLN) and housing (236 PLN). The Common Agricultural Policy of the European Union is also very costly and it seems to be counterproductive–it does not create any incentives for the development and restructuration of the agriculture. Polish contribution to the EU budget amounts to 432 PLN per person. Poland spends money also in numerous different fields (such as trade, modern technologies, science, tourism). The total of those “small” spendings is quite significant – 2835 PLN.

Poland spends annually 1152 PLN on the public debt servicing–more than on roads or higher education (656 PLN). Governmental spendings still prevail over the income, leading to the increase of the public debt of 675 PLN per capita, to the total of 22567 PLN (Polish methodology). According to the methodology used by the EU Commission (ESA95) the increase of the debt was even higher and reached 23810 PLN per person

Public spendings are financed from our taxes. Therefore, we have to be aware the requests for tax cuts or the increase of some spending (health care, highways, education etc.) has to be connected with indication of the financial sources necessary to cover them. We have to take into consideration whether we  will cover them with debt or by cutting other spendings.

Prepared by:

Aleksander Łaszek, e-mail:


Dominika Pawłowska