Wojciech Warski: Ringtones for Polish Entrepreneurship
Two numbers of Polish numbers “always” are the undisputed engine of the Polish economy. The revolutionary tax reforms of Leszek Miller’s movement, against his own contribution – CIT for a company with 27 percent. to 19 percent introduction of 19% from 2004 Flat PIT tax for sole proprietors – for almost two decades, they have activated the engine of national economic growth and have an impact on state taxes.
However, the government of Mateusz Morawiecki has at least an ambivalent note: on the one hand, it supported them generously in the corporation, and this was for fear of an avalanche of layoffs of employees from failing businesses, on the other hand, it puts forward a (true) thesis about the effect of micro and small enterprises and their current activity or configuration. In this rationalizing enthusiasm, he forgets about a macro detail: the sector of small and medium-sized enterprises (SMEs), with about 300,000 authorities in Poland, operate too briefly in the post-communist economy to have the investment momentum and the ratio to effective mergers and acquisitions. SME service companies – regardless of the entities as companies and entrepreneurs – are still individually included in the creation of growth and are not excluded from external shocks and returns in economic policy, funded by senders.
And there is no shortage of these twists and shocks for 2023.
Alarm for the economy
After the catastrophe of the Polish (in)Order and the related tax and payroll disorganization in companies, tax costs in business activity in 2023 will double or triple. This is due to both the increase in income tax by 9%. (prohibition of deducting tax from tax and benefit from the reintroduction of the Miller reform), as well as from a strong increase in ZUS contributions to over PLN 1,400. Income irregularity in small businesses is now so great that for many it is the minimum nail in the coffin of their business. This affects not only the tourism and catering industry, but also many categories of services for the population. Craftsmen and bakeries, shops, beauticians and repair shops are closing.
The aid shields were upheld by the company in the period, but the data for 2022 are alarming. Insolvency resulting from applications for restructuring or bankruptcy, according to Coface, brings 2752 companies, i.e. by 30 percent. more than in 2021. As much as 61 percent. of them for individual economic activity. By the end of October 2022, CEIDG recorded 157,700 applications for termination of activity in this register, i.e. 17 percent more than in the previous year. more year/year. Alarm data for the economy.
The consumption model of growth
The immediate location of distress is of course complex. Among them are abrupt changes in energy and gas costs, a standard increase in labor costs, the instability of the zloty and price inertia on the B2B intercompany market. The timing of transaction prices to impact-changed business effects means that during the transition period, some of the costs of fulfilling the obligations must be borne with the company’s resources. That I don’t have enough material and they just go bust.
In a situation where there are problems, they are incomprehensible, if you judge them in rational standards. The basic EU factor, inflation, is supposedly being combated, but not too much. The consumption model of growth is still supported and instead of taking money out of the market, borrowed billions are pumped into the future in the form of pensions and St. Barbara’s Day pensions. In the end, every percent to the next billions to the budget with the highest VAT! Again, he bows to support for the economic education of the nation, which is to become that prices are rising as fast, not faster and faster.
Perfidious conduct
Another mega-problem is the price-wage spiral, which has a strong impact on the finances of all types of companies. Due to the depreciation of the value of money, investors are faced with rising wage expectations of employees. The loss of male employees from Ukraine has sustained the “employee market” and (especially educated) staff are a designated asset. The derivative of the high amount, exceeding the statutory level of 5%, is a function of the wage indexation twice a year.
Ideologically motivated and harmful (without reference to the growth of the product) raising it in an effective way, the currently so-called This year’s database systems reach up to PLN 3,600 gross. And to move up the entire pay scale in companies, the side effect of which is additional ZUS income. That is: inflation is fueled, because it is not bad for those who release inflation, it supports the budget and ZUS, and its cost is passed on to society anyway. For the number imposed, the inflation tax is expensive, but due to the cause, the effects disproportionately affect the highest creative part of society, i.e. the norm. For perfidious conduct.
An enterprise belonging to a sole proprietorship of their owners is in an equally difficult situation. In economic terms, it is an important support for the market, even though it introduces a duality of the labor market. However, since publishers have no reason to carry out a reform of the “uniform tax” type, then in such a situation the resounding criticism expressed by the head of the supervisory board of ZUS, the appearance of the so-called recognized ZUS. This idea has various detailed proposals, it is interpreted, for example, by the spokesman for SMEs, Adam Abramowicz, and slightly differently by the Polish Coalition.
KP to limit the time period – for a period not longer than five to ten years – the right to suspend payments of pension contributions, while maintaining the obligation to make maintenance contributions. These are keywords for surviving the relief of small businesses that do not show how profits are made. At this point, by force of facts, they must be involved in the economic thought of President Kaczyński that “… if someone cannot be in the service of ZUS, then let him go full-time.”
KPO will not give many SMEs
Stranger still, the principled criticism of the fact that it also flows from the mouths of the UW and SGH, which assume mass non-use of pension elements. They ignore the German instruction and come out that active people act on people without imagination. The publication flaunts the alleged future necessity of providing the masses of the impoverished with an additional pension and dire budget consequences, what else. How many can there be? Few thousands? It is interesting that the same “care” is not expressed towards the 4 million professionally inactive Poles who do not build a permanent pension. Here’s the indignation and the brake effect.
In the political discourse there is an argument that the function of a program of radical improvement with the function of automatic resolution of an absurd dispute with the Commission over KPO. However, this fragment of the political counter-danse will not bring any new value to the SME sector. Potential use of financial projects from the National Reconstruction Plan as a result of assigning additional tasks to these entities. Hardly anyone notices that the government aid measures – according to the declaration of Minister Waldemar Buda – support projects financed by state-owned companies, and these are not very willing to cooperate with the private sector other than large companies.
The public opinion does not know KPO support projects, but it can be used that European money will be used to finance already running costs. Thus, the funds released, which in such a case would have to be obtained from the PFR/BGK bank to finance, among others, public social policies and pre-election support for TVP.
The powerlessness of the organization
In the opinions on the results of the time for which the study is performed, there are no results in the assessment from the organization’s environment. One is not judged by representatives of micro and small quantities, and large companies do not help them. Therefore, some political parties will take into account the role of actual spokespersons. This confirmed the impotence of the leading organization and reduced to the role of toothless effects, ignored by the government, contrary to, for example, the obligation of the Act on the Social Dialogue Council. However, this is nothing new – the official government is not in the habit of consulting anyone on the matter, and sudden contacts are only facades.
A picture of the state of Polish entrepreneurship is presented to force the government to investigate and take remedial steps. It is not about erecting monuments and honoring, which are the strength of the multitude of people who are “at work” almost 24 hours a day, provide risk guaranteed by their own assets and are employers of several million employees. It is about protecting this economic engine from economic devastation and maintaining these foundations of the Polish economy in a tolerable condition.
For now, everything has been confirmed that the government does not have this awareness and “milks” instructions for various measures (recently: the Orlen fuel scandal), regardless of, for example, the results already have effects in the investment index, spending barely 13 percent. GDP; lowest in history. Well, an entrepreneur is not a tight-knit electoral group, so you can pluck them from the cash with impunity, which you have to throw in “your own”. This is not wise management of the economy, but wasteful economy.
Dr. Wojciech Warski is an entrepreneur, head of the Economic Council of the Polish Coalition, former vice-chairman of the Social Dialogue Council and former vice-president of BCC