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Poland plans no budget deficit for first time in 30 years

WARSAW, Poland (AP) — Poland's next annual state budget will for the first time in 30 years not run a deficit, mainly thanks to efficient tax collection and changes to the pension system, the prime minister said Tuesday.

Mateusz Morawiecki spoke following a weekly government session that approved a draft 2020 budget where spending and income are balanced at 429.5 billion zlotys ($109 billion). Morawiecki noted that it is Poland's first budget without a deficit since it became a democracy. It still needs consultations with worker and employer groups and approval from two parliament chambers and the president.

"We are very responsible in managing the public finances," Morawiecki said, promising that the budget will "no longer be an ATM for tax-evading criminals." The announcement comes before Oct. 13 parliamentary elections, in which the ruling party is expected to win a majority, chiefly thanks to its program of generous subsidies to families with children and to the elderly.

Morawiecki vowed all these programs will be continued. The government's high spending has caused concern among some economists and ordinary Poles about the condition of state finances, especially after inflation started to rise this year.

Morawiecki noted that the state finances were helped by an increase in state income, such as value-added sales tax and corporate income tax, and better collection of personal income tax. Significant funds are also expected from a tax on pension funds, from the sale of 5G wireless licenses and green gas certificates, and by reducing state administration jobs.

The economy is forecast to grow 3.7% next year, with inflation seen at 2.5 %. Observers noted that a budget can be amended during the fiscal year, to allow for a deficit.

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