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SDKÚ HITS BACK, CRITICIZING OPPOSITION PARTY'S PLANS TO DISMANTLE FLAT TAX

Smer document pledges full return to social state

THE LEFT-wing opposition party Smer released a document at its national party congress on December 3 that explains the principles it would defend if Slovak citizens voted the party into power. The document is not an election manifesto, says party chairman Robert Fico, but an attempt to define Smer's policies.

THE LEFT-wing opposition party Smer released a document at its national party congress on December 3 that explains the principles it would defend if Slovak citizens voted the party into power. The document is not an election manifesto, says party chairman Robert Fico, but an attempt to define Smer's policies.

The document, entitled The Return to Human Dignity: The Initial Steps to the Realization of a Social State, confirms that Smer would reverse some of the fiscal reforms implemented by the current government for which the country has received international acclaim.

Fico considers the current government "ultraliberal" and favours a return to a social state.

According to the document, Smer pledges to cancel the current flat tax system and introduce a progressive income tax. It also pledges to cancel the flat VAT rate and introduce lower VAT on select goods, such as food and books. It would cancel the healthcare co-pay of Sk20 (€0.50), and re-evaluate some privatization processes. It would also require the state to invest in healthcare and education.

The Slovak Democratic and Christian Union (SDKÚ) responded to the document immediately, saying that Smer's plans would return Slovakia to the dark days of Socialism.

"Socialism does not work. It lost to a system based on the free market and private ownership," said Slovak Prime Minister and the SDKÚ Chairman Mikuláš Dzurinda.

According to Fico, Smer's policies are tailored around six individual rights - the right to: education; a dignified income; a pension that guarantees a dignified life in old age; the right to a job that is adequate to one's education; the right of regions for balanced development; and to health and accessible healthcare.

Fico said that these should not be understood as Smer's political election platform but rather as a set of "minimal values that the party will push through".

Although Fico will not say who his potential government partners might be, he insists that he will not be party to a crowd interested in introducing university tuition.

"If someone thinks that Robert Fico would enter a cabinet that would vote for the introduction of university fees, then think again. I would prefer going to the opposition," said Fico.

The Smer chairman reiterated that his party would not publish any statements regarding any possible government partners.

Smer pledges that it will review all privatization decisions made by the current government, and will not hesitate to cancel contracts that prove to have breached the law.

"If the only motive [of any ongoing privatization] is financial gain, we will find out. We will review all privatization decisions made at this mad pace a few months before the general elections," said Fico.

He accused the government of not listening to its people but instead to US experts.

According to the SDKÚ, Smer's agenda and the plans outlined in its document are "incompetent, irresponsible, populist and demagogic," said SDKÚ member and Slovak Finance Minister Ivan Mikloš.

His ministry's Financial Policy Institute (IFP) even calculated that the proposed changes to the tax reform would cause a Sk9 billion (€238.1 million) outage in the state budget income. Smer says, however, that the changes would improve the budget income by Sk1.7 billion (€45 million).

Mikloš insisted that Smer's plans would endanger Slovakia's competitiveness, jeopardize people's rising living standards and employment growth. Cancelling the flat tax would turn off investors and inevitably lead to fewer new jobs for Slovaks.

According to the SDKÚ, Smer's plans do not address how the state would pay for the extra spending.

"Smer's documents only talk about how to give out but fail to mention how it would generate the funds," Mikloš said.

Smer did not hesitate to shoot back. Smer Deputy Chairman Robert Kaliňák said: "They counted quite a few things wrongly [in the past]. Are they now supposed to be the ones to review someone else's data?"

"What is Mr Double-Wages Dzurinda talking about?" asked Kaliňák at a December 5 press conference, referring to Dzurinda's unfulfilled promise of doubling the average national wage.

Smer also accused the government of causing a Sk7 billion (€185.2 million) shortfall in the proceeds expected from the privatization of the Slovak gas utility SPP by failing to ensure against exchange rate fluctuations.

Young right-wing parties, such as the Civil Democratic Youth (ODM), joined the debate. In a statement sent to The Slovak Spectator, the ODM stated that Smer's document "reminds us of the time when Robert Fico and his comrades wore pioneer scarves and marched under the red flag".

Analysts agree that the verbal battle between Smer and the SDKÚ is bound to continue as the two parties fight for voters ahead of next year's general elections.

Paradoxically, neither leader of either party has ruled the other out when asked about their possible coalition partners in the next government.

While Fico refuses to give any statements about his potential government partners, Dzurinda hedges. When asked about the possibility of forging a coalition with the left-wing party Smer, he said: "I don't think it would be fair if we talked about who will go [into government] with whom today. I do wish, however, that the current right-wing bloc continues working together."

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