Polish Briefing 28 August, 2017 9:00 am   
COMMENTS: Mateusz Gibała

Polish Briefing: Biggest July budget surplus in the last 28 years. Billions for mining

What goes on in Poland on the 28th of August.

Morawiecki: it’s the biggest July budget surplus in the last 28 years

“In July the Polish budget had a PLN 2.4 bn surplus,” said the Ministry of Finance on Friday. “This is the biggest surplus we have had in 28 years,” said Deputy Prime Minister, Minister of Economic Development and Finance Mateusz Morawiecki. “This year the budget deficit may be lower than PLN 40 bn when calculated according to the domestic methodology,” he added.

“It has been the first time in the last 28 years when we had such a budget surplus after July. Obviously, this is very good news. This results mostly from the fact that we have successfully tightened the tax collection system. This pertains not only to VAT, but also to CIT from which income has been growing quicker, thanks to increasing our analytical skills, working with taxpayers and creating new institutions, including the National Tax Authorities. These methods are effective and we are implementing them mostly to improve the income,” the Deputy Prime Minister said.

He ensured the good budget results did not stem from savings on the expenditure. However, he also stressed the expenses were under control and constituted about 53% of the annual plan.

Billions for mining

PLN 10.42 bn for 2016-2020 for the hard coal industry is not the only help the sector received. Within a year Polska Grupa Górnicza (PGG) received PLN 3 bn.

The latest, yet another version of the program for the hard coal industry until 2030 has been submitted for consultations. The document is one of the attachments to Poland’s energy policy until 2050, which is to be presented by the Energy Ministry this fall. Will this finally be the golden mean for a mining reform in Poland?

In November 2016 the European Commission gave Poland a green light to use public aid to shut down unprofitable hard coal mines. This enables the government to spend PLN 8 bn until the end of 2018, the deadline Brussels set for shutting down mines with the aid of state funds.

German press: Energy prices going up because of RES fee

“Energy bills in the recent decades have soared because, among others, the state has spent large sums on renewable energy sources (RES). Has this been worthwhile?,” asks Germany’s Spiegel weekly.

When in 2000 the then German government adopted the act on expanding renewable energy sources, it also introduced the so-called RES fee. Since then the charge which was supposed to be spent on developing renewable energy has been added to every kilowatt-hour. The biggest burden was put on households as energy-intensive industries were exempt from the fee.

“The participation of photovoltaics, wind turbines, hydroelectric power plants and biomass has been increasing in the energy mix since then, just like the criticism of the RES fee,” the weekly wrote.

Since 2000 energy prices for kilowatt-hour went up significantly in Germany. Today it costs on average twice as much as 17 years ago. Whereas the spot market, where energy suppliers buy additional power, has remained almost intact.