Speech of the Prime Minister of the Czech Republic, Mirek Topolánek, at the Chamber of Deputies on Tuesday 14th August, 2007

Dear deputies,
before we start to discuss various amending motions, allow me rather general view of today's session and of the sessions of the following days.
I would like to begin my speech with two questions: Is it good to make debts? Is it good to lie?
I have not become the Prime Minister of this country to continue in its indebting. I have not become the Prime Minister to lie to citizens of this country.
This country needs badly the reform of public finances. I know it. You know it, too. And the essential thing is that in spite of the demagogy of the opposition and trade union leaders 80% of citizens take this into consideration and say: YES, the reform is necessary and they say NO, it is not possible to continue in indebting this country any longer.
I am not a man who adapts his policy according to the opinion polls; nevertheless, I cannot deny that I am very delighted when my policy is in compliance with the wish of people.
We, politicians are very of the opinion that he who wants to win the elections must not say the truth, that he who wants to be successful must on the contrary to give something to everybody, to promise something, to please somebody and to buy somebody ...
Now, citizens themselves say: enough of that! They say: we do not want the policy of throwing money down the drain. We do not want to indebt our children. We do not want to endanger payments of our pension allowances and the healthcare for needy people through a populist wastage.
This is a capital, which must not be wasted. If we do not stop increase of debts, we will lose the rest of our credibility. And above all, in several years even more drastic cuts will be necessary, which would affect the poorest people, which would affect families with children, pensioners and seriously ill people...
Dear deputies, we have met today because of the only one matter. We are here to avert threatening collapse of state finances. No more, no less. This is the essence of the reform package, which we will – in the better case – enriching by amending motions today.
The reform, which we are discussing today, is too soft for some people, too hard for the others. I say responsibly that the reform has been preparing and negotiating forethoughtfully for a long time and it is prepared in the form in which it may be and must be.
It is a necessary and sufficient condition, so that the country could operate. However, it is not sufficient condition that could cause improving things. For that, further system changes will be necessary, on which we will cooperate, as I hope - pension reform, healthcare reform and the reform of the social system. But these changes cannot be introduced without this first step, ladies and gentlemen.
If we do not take this first step, we will not logically take those further steps, which are included in the programme of the government. I would say that it is a small step for the government but a great step for the Czech Republic.
The reform is necessary. It is not a cliché, it is a fact. It was Vladimír Špidla who wanted the reform of public finances. He did not succeed and it was an important cause of his fall. Also Jiří Paroubek wanted the reform during those negotiations on the new government. Those negotiations did not fail because of the programme, but because of distrust and because of lack of credibility. This lack of credibility is persisting up to the present day, as the ČSSD contests what it agreed to yesterday.
And why is the reform necessary? What would happen if the reform package, this zero reform step, the basic phase of stabilization of public finances was not passed? The system of public finances would collapse. Not in fifty, not in thirty, not in twenty years. As early as in two years the mandatory expenditure would exceed revenues of the state budget. In two years of inactivity, ladies and gentlemen.
Would you take responsibility on that, ladies and gentlemen? I will not, definitely. And the government will not take responsibility on that either. For that matter, majority of the Czech public, who ask for reforms despite of massive anti-campaign, will not take responsibility on that either.
The reform is necessary then. And I repeat again, you know it. Also visitors on the gallery know it – and if they do not know it, then let them make a opinion poll among trade union members whether they are content with colossal growing of debts, which will endanger all the social security.
Indebtedness of the country does not satisfy families with children, it does not satisfy pensioners, it does not satisfy ill people, it satisfies neither poor nor rich people. It does not satisfy anybody, except of those who take unfair advantage of the system, except of fare-dodgers, except of bureaucrats and corrupt people, except of politicians who buy votes for money of other people.
Yes, this narrow group of inhabitants will lose money in the course of the reform. Especially from the long-term point of view, because they will lose easy living, power, and influence. All the others will profit on the reform, especially from the long-term point of view, because the social security will remain and space for their activities and initiative will be opened. We are doing the reform neither for poor nor for rich, nor for voters of the coalition. We are doing the reform for all people with the exception of those who are taking unfair advantage of social allowances and who are shying away from work. If you ask me about the price of the reform, then I say: It is not a zero price, of course. Except of action against fare-dodgers, the price also includes slowdown of social expenditure growth. I emphasize – slowdown of growth, not a decline.
Everybody is afraid of the fact that the reform may affect just him/her. Nevertheless, I guarantee that when we take into consideration absolute figures, nobody will lose on it except of those fare-dodgers. It does not concern only taxes but also social allowances. In particular, the reform is prepared in such to make profit for families with children, pensioners and needy persons. I guarantee that.
The reform will give pain only to those who are shying away from work. The other will pay only in the form of slowdown of social expenditure growth. All of us agree that the growth of 2007 was anomalous and that it was caused by the pre-election collective insanity – insanity, which all the parties are responsible on, to certain extent. Let us rectify it, deputies.
Let us rectify this mistake of ours in the name for the future, especially in the name of future of our children. I want it would be clear that we are not doing the reform just to save some money on taxes. The objective is a long-term one. The objective is to maintain social security for needy people. The objective is to stabilize public finances and to open space for further changes, which will guarantee that there will be money enough for pensions, treatment of ill people, for support of families. For fundamental cut of taxes.
To mention two examples, at least, how the reform takes the future into consideration – we decrease maternity grant, but this decrease would be compensated thanks to high increase of tax abatement for children. If we take into consideration preservation of family allowances for low-income and medium-income families, it means strengthening of economic situation of families. We also want to support in the long term proper upbringing of children, not only to ladle out lump-sum populist allowances.
Also reduction of taxes, which is so much criticized by the opposition, is a step towards the future.
Indispensable part of reforms is also support of education, science and research. We must have money for investments in the future. Even nowadays we invest in this sphere most money relatively. But for the real modernization of the country, for enhancement of its productivity, for reduction of the lead of the most advanced countries, for the transformation of the Czech Republic from a cheap assembly factory to a centre of innovation we need much more. Allow us to acquire means for this purpose, deputies.
Reforms are difficult to be promoted, as people tend to the opinion, and I quite agree with them after all, that every change is for the worse. Even those who want reforms are afraid of affecting their close relatives. I understand these fears but I say: If the reforms are not done, consequences will affect all people and in particular needy people.
The problem does not consist in the revenue side. The Czech tax system is robust and effective enough and the economic growth provides the public sphere sufficient financial means. It is not possible to punish efficient people for incompetence of the state by tax increase, as the opposition proposes. That is to say that the problem consists in the expenditure side, as expenditure growth has been faster than that of economy recently.
I want to tell especially you, deputies of the Social Democratic Party, that the reform will do good for your party and I am convinced you know it well. Once you get into power, you will not have to do it. You will have money enough for payment of social allowances, for pensions, for healthcare. And except of those necessary things, you will have money enough for a lot of useless things that you have weakness for.
You will not have to do the reform on the pattern of Hungarian socialist colleagues of yours, whose Prime Minister admitted that they had been lying in the morning, in the afternoon and in the evening. That lying finally caused such colossal debts that their reform could not be half as socially sensitive as that of ours.
But I pay homage to the Prime Minister Gyurcsány, as he found courage to learn from his mistakes, to admit them and to remedy them – despite dramatic character of Hungarian reforms. And I bid you, our socialist: Find courage at least not to place obstacles in the way of those who settle you debts.
The reform will be done anyway. The question is whether we choose the Hungarian or the Slovak way. Just today news arrived that the growth of the Slovak economy reached 9,2%, by three percent faster than the Czech economy. Thanks to eight-year reform effort of Mikuláš Dzurinda, Slovakia is an economic tiger nowadays. Hungary reduces its debts by heavy cuts. I and the government choose the first way, the way of prompt response, the way of responsibility, the way on which we do not lie to people. It is up to you, deputies, where you want to lead citizens of this country to.
I believe the reform to be passed. Not because it is perhaps the best one that I, as Mirek Topolánek, can imagine. But it is the best variant, which was possible to negotiate. I am saying this with full responsibility as the Prime Minister.
We will argue about particular points today, which are important for this one here or for that one there. But the fundamental things must not escape your attention. It is not so important how this or that detail is set, or this or that tax rate, this or that allowance. The problem is to stabilize public finances. The fundamental parameter of the reform must be preserved; it is the reduction of mandatory expenditure growth and consequently reduction of the state budget deficit.
In case it fails, I would regard it as our common and fatal failure. The reason why I connect the fate of the government with the reform is simple. It is not possible to govern without the reform. The fall into the debt abyss is threatening in the absence of the reform. In the absence of it, the Prime Minister would have to lie to people, or to give them a chance to vote for it once more. I would choose the second variant. Without the reform it is not possible to solve current problems of healthcare, pension and social system. There would not be money available for support of families with children, for investment in education and science, in infrastructure. Without this reform it is not possible to maintain social standards for a long time.
Dear deputies, you are to adopt the reform not because of yourselves or because of trade union leaders. You are to adopt it because of millions of people who are outside. Those people expect responsibility and ability to rise above ideological spitefulness. Let us take a common step, which is necessary, indisputable and socially friendly. After we save public finances and the future of the country, there will be still topics enough for performing our partial duels in far safer atmosphere.
I am convinced that nobody can have fundamental reservation to the reform. I have absolved tens of programme negotiations since the election with the ČSSD, with partners in the coalition. Based on this experience I say clearly: no opinion was omitted, everyone had to back off, it is or it should be an acceptable solution for everybody.
The reform you have at your disposal is not perhaps so fundamental and as radical as the great majority of voters, especially from my side, would wish. However, it is fundamental and radical reform in changing the trend. It changes the direction of the flow of public finances. It is fundamental because in the absence of it, further necessary steps towards improving quality of life of our citizens would not be possible to take.
We have been postponing key decisions in this country for a long time. We were afraid of taking responsibility for a long time. Now people are watching how you will decide today. It is necessary to stop indebting at last and I ask you for it.
I began my speech with explanation why the reform is necessary. The reform is life. The change is life. Substitute yourselves what would mean negation of the change.