Belka's new budget direction offers reduced spending and new tax initiatives

Public spending next year should be restricted to zl.183 billion, less than the zl.197.2 anticipated in the outgoing government's draft budget, according to the man tipped to be the country's next Finance Minister, Marek Belka. In a statement yesterday, Belka said this means that spending will not increase above the rate of inflation. The nominal increase in that case would be 5.5% and not 14% as predicted earlier. "In my opinion the decision is a breakthrough in the work on next year's budget. To date, the direction taken has been the wrong one," Belka commented. The prospective Finance Minister also revealed details of the action to be taken to amend the budget, already agreed on by the Democratic Left Alliance (SLD) and its partner the Labor Union (UP). The Treasury will most likely impose tax on bank deposits and bond returns. It is also likely that mutual taxation for married couples and tax breaks for home builders will be abolished. However, there will be no tax on stock exchange transactions. In addition, the Polish Peasants Party (PSL), which is to meet with SLD-UP officials today to discuss details of the new budget draft, advocates the imposition of an import duty, claiming this would raise an additional zl.13 billion for the Treasury. (Rzeczpospolita, p. B1; Zycie, p. 8) J.K.