GDP ratio will remain much below the 60% reference value (2006 – 47,6% of GDP, 2007 – 47,0%
of GDP, 2008 – 47,6% of GDP, 2009 – 47,8% of GDP 2010 – 47,8% of GDP).- The government aims at the consolidation of public finance in order to increase the efficiency of
the allocation of public funds. It was to be achieved by putting from the beginning of 2008 into
force solutions provided for in the new public finance act. However, the works on the project
submitted to the Parliament have been suspended. On the other hand, the process aimed at the
introduction of the performance budgeting has been started. The first pilot draft budget in such a
system, including certain general government entities (in particular the ministries and voivodship
authorities), was presented in the draft budget act for 2008. - The efforts aimed at further increase in the EU funds absorption have been continued. Ensuring the
funds for the project financing is one of the main objectives of the draft budget act for 2008
adopted by the government in September. The emphasis is also put on the implementation of
activities included in the National Reform Programme 2005-2008 (NRP). - Fixed expenditure play a considerable role in the structure of the general government expenditure.
It should be stressed, however, that the division of total expenditure into legally determined and
flexible ones is a matter of convention. Legally determined expenditure (stemming from legal
provisions of international agreements, inter alia: retirement and disability pensions,
unemployment benefits, housing allowances, contribution to the EU budget, debt serving costs) is
the major part of fixed expenditure. Flexible expenditure includes mainly remunerations,
expenditures on purchases of goods and services, subsidies to business, transfers to entities outside
the general government.
4. Conclusions
Fiscal policy must be designed, on the one hand, to be a factor stabilizing the economic situation of the
state, so as to ensure the credibility (and hence stability) of the economy both in domestic and
international contexts. On the other hand, the fiscal system should be flexible enough to allow the use of
a whole gamut of fiscal instruments, so that quick and adequate economic responses can be made if and
when problems arise.
In years to come, fiscal policy in Poland will be very carefully watched, as our country faces a series of
key decisions that will shape the structure of its revenues and expenditures for years. The main problem
nowadays is the massive disequilibrium of state finances; therefore, fiscal adjustment is now the most
often mentioned problem of Poland. It is vital that the badly needed reduction of the deficit of state
finances should not adversely affect the real sphere of the economy.
In this paper, we have endeavored to present some assumptions on which, in my opinion, fiscal policy in
Poland should be based, if it is to foster rapid and sustained economic growth. Fortunately, some of them
have already been implemented (for instance the principles of local government financing), others wait to
be put into practice. One should hope that, as we implement the strategy of fiscal reform, we will not lose
sight of the long-term consequences of specific decisions, while resisting current pressures, which
threaten to outweigh the multi-year perspective – for it is only through rapid and sustained economic
growth that Poland can close the distance to the highly developed economies. This is not to say that we
don’t feel that there is always room for improvements in expenditure prioritization, expenditure
management and control systems and hence shall pursue this continuously.