Receipt from the state 2014
End of April is the period of the income tax settlement in Poland. It as a good opportunity to think how much money does the Polish cost. First of all, 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. In the 2011 alone spendings of the state oscillated around the sum of 700 bln PLN. For a common taxpayer the amount may be an unimaginable abstract that is why Civil Development Forum, following Slovakian think tank INESS, ha prepared Receipt from the state for 2011.
The receipt shows public spendings estimated for 1 citizen. In total the Republic of Poland costed each citizen 17857 PLN. 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 3003 PLN on pensions, including 2414 PLN on the Social Insurance Institution (general system), 293 PLN on the Agricultural Social Insurance Fund and 296 PLN for pensions of judges, prosecutors, policemen, soldiers. Further 1299 PLN were spent on various supplements, benefits and early retirement. The spendings on pensions and early pensions constituted almost one fourth of the whole public spendings in 2011. 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 2011 the total amount of 1863 PLN per person. Whether it’ a lot or not at all and what is offered by the NFZ is up to decide for each of us. 741 PLN was invested in highways and expressways and local authorities spent further 913 PLN on the local transport and roads.
The public administration takes fourth place with 967 PLN which is 5% of the national spending. By firing half of administration employees, public spending would be lowered only by 2,5%. Therefore, do not believe politicians who argue that instead of raising the retirement age or introducing other reforms, they can only just dismiss unnecessary civil servants – costs of administration are not so high that their limitation can solve all the problems of Polish public finance.
Other positions on our receipt are social benefits (639PLN), environment protection (302 PLN), sport and recreation (248PLN), culture (236 PLN) and housing (2401 PLN). The Common Agricultural Policy of the European Union is also very costly (592 PLN). It is mostly funded by EU, buy it cannont be forgotten that Polish contribution to the EU budget amounts to 477 PLN per person. What is worse, it appears that EU funds that are spent on Polish villages insted of being used for modernisation are only keeping over employment in agriculture. Poland spends money also in numerous different fields (such as trade, modern technologies, science, tourism). The total of those “small” spendings is quite significant – 2161 PLN.
In 2011 governmental spendings still prevail over the income, leading to the increase of the public debt of 1810 PLN per capita, to the total of 21891 PLN. According to the methodology used by the EU Commission (ESA95) the increase of the debt per capita was 395 PLN higher and the debt reached 23182 PLN at the end of 2011. It means that current public spending will be financed by future generations.
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.
* Receipt’s update: According to data published by Eurostat, the public spending in 2011 amounted 665 bln PLN, not 668 bld PLN, as was prognosed at the end of November. As a result, public spending per one citizen was 17857 PLN and not as it was previously assumed – 18481 PLN
By the end of April some of the public institutions still have not published their detailed financial reports for the year 2011, and therefore our calculation were approximate, showing how much it is spent for given service in comparison to others.
Aleksander Łaszek, e-mail: firstname.lastname@example.org