Klaus signs 2006 budget deficit increase, sickness benefits bill
Prague- President Vaclav Klaus today signed the bill increasing the 2006 state budget deficit by about ten billion crowns that are needed to pay out pensions, and the bill postoponing the new sickness-benefits system's validity until 2008, presidential spokesman Petr Hajek said.
The Chamber of Deputies passed the bill on the increase in this year's budget deficit on December 12.
Labour and Social Affairs Minister Petr Necas and Finance Minister Vlastimil Tlusty (both Civic Democrats, ODS) said that the pension system would have been otherwise short of some 10 billion crowns this month.
The 2006 budget deficit will thus increase to almost 84 billion crowns from the originally planned 74 billion.
The pension system ran out of money early last year and in 2004 as well, when the then government borrowed a few billion crowns from the Czech Post company.
The amended sickness benefit law adjourns until 2008 the validity of the original law under which the benefits were to be paid by employers for the first two weeks of illness and which was to come into force this January.
The state will thus continue paying out sickness benefits to employees next year, in accordance with the current regulations.
The adjournment has been jointly initiated by the two largest parties, the (ODS) and the Social Democrats (CSSD) and passed by the Chamber of Deputies on December 12.
Necas and his predecessor Zdenek Skromach (CSSD) recently agreed that gradual changes in the sickness benefits system should come into force as of 2008, when the health insurance fees that companies pay for employers are to drop to 2.3 percent from the current 3.3 and the state is to return to firms a half of the sum they paid out in sickness benefits.
One year later, companies' contributions are to further drop to 1.4 percent and the state would no longer pay anything to them, the politicians have agreed.
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