Press Advisories

19. 10. 2020 21:02

Government approves draft state budget for 2021 and takes further measures to support the economy during the pandemic

At a press conference, the government announced new measures against coronavirus, 19 October 2020.
At a press conference, the government announced new measures against coronavirus, 19 October 2020.
The Czech Republic to run a deficit of 320 billion crowns next year. The relevant bill on the state budget of the Czech Republic was adopted by the government of Andrej Babiš at a meeting on Monday, 19 October 2020. At the same time, the cabinet supported other measures in order to help, for example, audio-visual artists, travel agencies and guides and investors overcome this difficult period of the coronavirus pandemic. People will also not have to go to public authority offices so often when arranging benefits.

The state budget of the Czech Republic anticipates revenues of 1.487 trillion crowns and expenditures of 1.807 trillion crowns in 2021. It takes into account the government's priorities for next year, current macroeconomic forecasts and the update of expected revenues from the European Union, including new financial instruments by means of which the European Union wishes to help member states overcome the crisis. The government bill meets the parameters set by the amendment to the Budget Responsibility Act, which for 2021 temporarily created a fiscal space at the level of a structural deficit of up to four percent of GDP.

The government also agreed to a draft budget for the State Fund for Transport Infrastructure for 2021 with a medium-term outlook for 2022 and 2023, which anticipates spending 128.7 billion crowns next year, of which 83 billion is planned for capital expenditure (details in this press release from the Ministry of Transport). It also signed off draft budgets for the State Investment Support Fund and the State Environmental Fund.

The government devoted a major part of the meeting to further measures to support those segments of the economy that are in difficulty as a result of the coronavirus pandemic. It approved a draft amendment to the Act on Certain Measures to Mitigate the Impact of the SARS CoV-2 Coronavirus Epidemic on participants in court proceedings, injured parties, victims of crime and legal entities, and amendments to the Insolvency Act and the Civil Procedure Code, and to the Act on Bankruptcy and means for its resolution, by means of which it seeks to extend essential insolvency law measures which have already been adopted in connection with the spring wave of the epidemic. They are intended to help entrepreneurs who have found themselves in economic difficulties due to the effects of the pandemic and would be in danger of bankruptcy. More information in this press release from the Ministry of Justice (in Czech language).

A draft amendment to the Act on Investment Incentives  is intended in turn to help investors more easily meet the conditions for an investment incentive in these difficult times. The main objective of the draft is to reintroduce the possibility to extend the deadline for meeting the general conditions in justified cases. The government wants to discuss both laws in Parliament under the legislative emergency powers so that they can enter into force as soon as possible.

Under the same regime, the government also wishes to implement a draft law on certain adjustments to state social support benefits and the care allowance in connection with the state of emergency situation during the epidemic, by means of which it wishes to limit to the essential minimum any public contact with workplaces of the Czech Republic Labour Office . Applicants for state social support benefits and care allowance in the fourth quarter will not have to provide the required documents at the these offices, the authorities will automatically take over documents from the previous quarter. This rule will not apply only when submitting new applications. More information in this press release of the Ministry of Labour and Social Affairs (in Czech language).

The government has also agreed to financial support for small companies operating in the audio-visual industry. It has changed Government Resolution No. 408 dated 9 April 2020 on certain measures to minimize the effects of the COVID 19 coronavirus pandemic on the culture sector and has reduced the approved amount of funding for the provision of regional cultural infrastructure in the field of cultural heritage from 110 million to 12 million crowns; the 98 million saved will support cinema operators, and production and distribution companies through the State Cinematography Fund. The Budget Committee of the Chamber of Deputies of the Parliament of the Czech Republic will request approval of the transfer in accordance with the law. More information in this press release from the Ministry of Culture (in Czech language).

A new subsidy programme will also be announced by the Ministry of Regional Development, and will be designed to support tourism. The government has set aside half a billion crowns for the Covid - Tourism promotion programme. Tour operators will be able to apply for subsidies, and can receive up to 2.75 percent of the planned revenues from the sale of tours and from the sale of tourism services which are part of combined travel services for 2020; so will travel agencies, which can receive 500 crowns per tour cancelled because of the pandemic and purchased in the period from 1 December 2019 to 1 October 2020, and for any spa stay cancelled at the time when facilities were closed; and incoming travel agencies, for which support of 50,000 crowns is allocated. Tourist guides will be able to apply for the same amount.

The government has also approved the announcement of a tender for the position of Chairman of the Office for Competition to succeed Petr Rafaj, who resigned on 1 December 2020, and has set up a three-member selection committee composed of Ing. Yvona Charouzdova, JUDr. Mgr. Vlastimil Fidler and RNDr. Josef Postránecký. The announcement of the tender can be found at http://www.vlada.cz/cz/oznameni-o-vyhlaseni-vyberoveho-rizeni-na-pozici-predsedy-UOHS-184317/ (in Czech language).

The cabinet also dealt with several adjustments to the crisis and emergency measures. From Wednesday, people will also have to wear face masks even in cars, if they are travelling with someone who is not a member of a joint household, and in publicly accessible places in the built-up area of a municipality, if at that place there are more than two persons closer than two metres apart and they are not members of the same household. It will be mandatory for health after- and long-term care facilities and residential social facilities  to allocate bed capacity for clients with Covid-19; practical teaching and practical training of pupils and students in medical disciplines will now also be exempt from the ban on the operation of school facilities. Hospitals will now have to report to the ISIN care coordination system the admission to in-patient care of any patient with Covid-19, within one hour.

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