10 ways the new government plans to change daily life in the Czech Republic

From the junk food tax to LGBT+ rights how will the regime change be felt in the lives of ordinary citizens?

 William Nattrass

Written by William Nattrass Published on 10.11.2021 13:21 (updated on 10.11.2021) Reading time: 5 minutes

The Czech Republic’s incoming coalition government, to be led by prospective Prime Minister Petr Fiala (ODS), wants to significantly change the course of the Czech Republic’s future. The group has already agreed its program for government, with policies to affect day-to-day life as well as the Czech Republic’s relations with the wider world. Here are ten of the key proposed changes which could affect your life:

Parental leave for grandparents

The incoming administration wants to expand the definition of parental leave, allowing grandparents to claim parental allowance in place of the parents themselves. This move would be intended to allow greater flexibility for families looking after small children by creating more possibilities for parents to continue working. At the same time, the government wants to encourage the creation of more children’s groups to help working parents. Another priority in this area is promoting higher levels of part-time work, allowing parents to balance raising kids with the continuation of their career.

Raising the speed limit

The new government is also considering the possibility of raising the speed limit on some highways from the current maximum of 130 km/h to 150 km/h. A statement from the coalition’s program said that after consultation with road safety experts, this change is being planned where possible.

A push for affordable housing

Most agree that the housing market in the Czech Republic is broken. Prices of flats in Prague are among the most unaffordable in Europe, and the growth in property prices in recent years has massively outstripped wage increases.

The new government hopes to start rectifying this situation by facilitating preferential mortgages for first-time buyers and young families, possibly involving direct state aid and a bonus for each child in the family. Still, the problem of affordability is not limited to buyers; in order to make housing more affordable the government will also need to help developers cut prices. To this end, it is also planning a VAT reduction for construction and reconstruction projects.

Cutting red tape

One of the main priorities in the programs of many of the individual parties now heading into government is cutting bureaucracy in the Czech Republic. They hope digitization of state processes and a streamlining of the activities of offices will make life easier for the general public while cutting out unnecessary state expenses. Indeed, Petr Fiala has already said each government ministry will be expected to cut its costs next year in an effort to reduce the Czech Republic’s staggeringly high budget deficit. One of the biggest priorities in streamlining official procedures will be creating a unified and contactless system of mandatory tax, social security and health insurance contributions from citizens.

Tax reforms

Significant changes can be expected in taxes. The incoming administration wants to raise the threshold for mandatory VAT registration from CZK 1 million to CZK 2 million. It also wants to make taxpayer discounts subject to regular review; under the previous regime, discounts remained stagnant for a long time before finally changing this year. The new government also wants to reduce social security contributions from employers by two percent, subject to the restoration of stability to public finances.

Tax changes are also planned to encourage social change. To combat an ageing population and a decline in fertility being seen in the Czech Republic (and throughout Central Europe), the government plans to introduce tax breaks for families who receive parental allowance or have three or more children. Finally, the new regime intends to introduce excise duties for food and drink products deemed to be harmful, alongside existing tobacco and alcohol excise duty; meaning the cost of junk food could be about to go up.

Pension and healthcare reform

A fundamental change planned by the incoming government is creating the option to make additional supplementary health insurance contributions on top of the standard service currently in place. It has also set itself the target of making healthcare more accessible in rural, less-well-populated parts of the country.

Pension reforms will see a reduction in the period which must have been worked for people to qualify for an old-age pension. The new regime will also raise widow’s and widower’s pensions and introduce the possibility to send one percent of pension insurance contributions to parents or grandparents.

PRIVATE PROPERTIES

Apartment for rent, Flatshare, 100m<sup>2</sup>

Apartment for rent, Flatshare, 100m2

Bubenská, Praha 7 - Holešovice

Villa for rent, 380m<sup>2</sup>, 1140m<sup>2</sup> of land

Villa for rent, 380m2, 1140m2 of land

V uličkách, Praha 6 - Nebušice

Apartment for rent, Flatshare, 15m<sup>2</sup>

Apartment for rent, Flatshare, 15m2

Stará cesta, Praha 4 - Braník

Promoting culture

At least one percent of the state budget should be allocated to cultural enterprises, according to the plans of the new government. Tax relief is also planned for sponsors and patrons of culture, encouraging greater investment in the arts. The coalition also intends to amend existing copyright laws to keep up with the rapidly evolving digital environment in which much culture is now disseminated and experienced.

Cutting emissions and helping the environment

Andrej Babiš’s government was famously sceptical about some EU-wide measures aimed at tackling climate change, especially the proposed ban on the sale of combustion-engine vehicles by 2035. The new Czech government is likely to take a more active role in combating climate change; the coalition’s program states that achieving carbon neutrality by 2050 is an opportunity for the Czech Republic to develop sustainable new technologies. More investment and jobs in energy innovation is therefore likely. The coalition has also already expressed its intention to designate two more national parks in the Czech Republic, adding to the four already in existence.

Boosting education, changes to the curriculum

The coalition plans to allocate more money for education, focused on decreasing inequality at schools, providing new teachers with better support, and reducing the administrative burden for schools. Following the shift online during the pandemic, meanwhile, the new regime plans to invest in digitization to bring schools into the modern era. Changes to the curriculum are likely to focus on a reduced amount of content to be learnt, giving students more time to practice and deepen their knowledge of the subjects they are taught. This will likely entail some changes to school entry and leaving exams.

Society: LGBT+ rights and migration

The coalition has stopped short of including the legalization of same-sex marriage among its program points. The issue is contentious among the individual coalition partners: the Pirate Party strongly supports gay marriage, while the Christian Democrats oppose the change. Yet a more liberal approach to LGBT+ rights may in general be expected, bringing the Czech Republic closer into line with Western countries; the coalition program already mentions modifications to the legal conditions for registered partnerships.

One area in which little change from the previous regime can be expected is migration. The incoming government has already expressed its opposition to the EU's migrant quota system for the allocation of migrants coming from war-torn regions. Foreign labor has meanwhile been suggested as a solution for the labor shortages afflicting the Czech Republic, but the incoming administration has so far been cautious when discussing the need for foreign workers.

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