Polish government approves balanced budget for 2020

WARSAW: Poland's government approved a plan on Tuesday to eliminate its budget deficit in 2020, Prime Minister Mateusz Morawiecki said, as the ruling nationalists sought to emphasise their economic credentials before a national election on Oct. 13.

Both revenues and spending are envisaged at 429.5 billion zloty ($109.40 billion), Morawiecki said.

"We present the balanced budget for the first time in 30 years," he told news conference. "We're reducing debt.

"And here's the main point - tax revenues were leaking to tax havens in the billions of zlotys. This gap has been reduced significantly," he said.

Robust economic growth and improved tax collection has kept Poland's deficits low in recent years, despite substantial welfare spending. Last year's deficit totalled 10.4 billion zlotys.

Earlier, the newspaper Rzeczpospolita reported that the 2020 budget would benefit from the sale of mobile phone frequencies, rights to carbon dioxide emissions and cash connected with the country's pension reform. Taken together, those steps should bring in 17.8 billion zloty.

Another 14.9 billion zloty will come from improvements in tax collection and 5.2 billion zloty will come from changes to social security system payments.

Higher alcohol taxes are expected to bring in 1.1 billion zloty, a new tax for millionaires another 1.1 billion zloty and changes to the ecological tax 1.4 billion.

Critics called the balanced budget plan a government ploy in a campaign for parliamentary elections due on Oct. 13. They say its assumptions are too optimistic in light of an expected economic slowdown.

Despite scandals that plagued the PiS in recent weeks, it still leads in opinion polls. Whether it could form a government - alone or in a coalition - would depend on the mix of parties that won seats in the elections.