Senators approved a reduction in state support for building savings

Prague - Senators today approved, in a shortened session, an amendment that reduces state support for building savings. The proposal will bring the state around six billion crowns next year. Social Democratic senators criticized the amendment mainly for its retroactive effect. The Social Democratic Party has already announced that it will file a constitutional complaint, but according to the Ministry of Finance, the proposal is in accordance with the law. The amendment is now headed for the president's signature.
    "A dangerous signal has been sent to the entire financial sector that the rules set by the state can change even during the game," responded Jiří Šedivý, secretary of the Association of Czech Building Savings Banks. He stated that the approval of the changes will lead to a decrease in the volume of deposits at building savings banks, which will also result in a reduction of funds for loans. "As a result, building savings banks will have to limit their offers or raise loan prices," he added.
    According to Šedivý, the approval of the changes reflects the balance of power on the political scene. "From the clients' perspective at building savings banks, it is a shame that a meaningful debate on the topic did not take place," he told ČTK.
    The state support attributed for next year based on this year is proposed to be taxed at a rate of 50 percent. In subsequent years, the state contribution is expected to decrease from the current 15 percent to ten percent of the annual deposits of savers, with a maximum of 2000 crowns per year. The amendment also taxes earnings from building savings.
    Finance Minister Miroslav Kalousek (TOP 09) pointed out that building savings is currently the most advantageous product on the market. "It's hard to compete when we have such high state support," he said. Next year, he wants to present another amendment that will address the purpose of savings, which can currently be used for anything, and expand the possibility of providing this product to all banks.
    Social Democratic senators criticized the proposal for its retroactivity, stating that it is "right in its crystal clear form". According to Jiřina Rippelová (CSSD), if the law comes into effect, the Czech Republic will lose its label as a rule of law. She believes this is a gigantic change of rules in the middle of the game. The Ministry of Finance admits only the "false" retroactivity, which is permissible. According to Kalousek, withholding tax is not retroactive at all.
    Jan Hajda (CSSD) called the amendment a punishment for responsible people who save. Some senators - like Václav Koukal (KDU-ČSL) - also pointed out that the change in building savings could decrease people's trust in the stability of conditions for pension savings. According to Jaroslav Kubera (ODS), however, the building savings law should be correctly named the law on advantageous savings and state support for advantageous savings.
    The proposal was supported by 42 out of 76 present senators. 31 were against it, and three abstained from voting. The Senate evaluated the proposal in its pre-election composition, where the government has a majority. It was discussed in the Chamber of Deputies under legislative emergency procedures.
    The approximately six billion crown revenue for the state budget next year will be secured by a 50 percent tax on state support. In a year, the state is expected to save an amount between 6.5 and 8.5 billion crowns.
    The proposal belongs to amendments aimed at helping keep the budget deficit next year within 135 billion crowns. Therefore, the government requested its expedited consideration under legislative emergency so that it could take effect from January.