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Tax hikes would crush support for Polish PM -poll

world Updated: Jun 26, 2009 20:34 IST

Poland's centre-right prime minister would risk losing almost half of his popular support if the government bit the bullet and raised taxes to fill a budget hole caused by the economic downturn, a survey showed on Friday.

Prime Minister Donald Tusk and his Civic Platform (PO) party maintain poll ratings of around 40 per cent, boding well for upcoming presidential and parliamentary elections despite a slowdown which has raised unemployment and hurt consumers.

But Tusk's government, which swept to power in 2007 on a platform of tax cuts, has signalled it might have to make unpopular rise in taxes next year as it struggles to rein in a budget deficit that it has already had to raise by half.

A survey by pollster Homo Homini for daily Dziennik and Polsat News showed 49.2 per cent of Poles who back Tusk would withdraw their support if he implemented tax hikes.

Tusk, the most popular politician in the European Union's biggest ex-communist state, is widely expected to run for president in an election due in the autumn of 2010. Parliamentary elections follow in 2011.

His PO-led coalition government is the most economically liberal since the toppling of the communist regime in 1989 and has slashed its budget deficit by a third since taking power.

But the government was forced to up its planned cap for the 2009 deficit to 27 billion zlotys this week from a previous 18.2 billion. Ministers are trying hard to avoid deep spending cuts or tax hikes but Tusk himself has conceded some action may be necessary.

Asked about the survey and the possibility of tax hikes, the head of PO's parliamentary caucus, Zbigniew Chlebowski, said on Friday: "Increasing taxes would be the last resort. What we need to do first is to reduce spending, speed up privatisation... But if that isn't enough, we'll have to raise taxes."

"But if we need to increase taxes, we would only do it temporarily for two years - 2010 and 2011. VAT is the main source of budget revenues, some 100 billion zlotys, so we have the most possibilities there," he said.

President Lech Kaczynski, a right-wing populist who has often vetoed the government's reforms, and opposition parties are expected to oppose any proposed tax hikes in a bid to curry favour with voters.

"(Any hikes) could lead to some groups withdrawing their support for Tusk and the Platform. It's a real threat," said Iwona Jakubowska-Branicka, a professor at Warsaw University. "Nobody likes higher taxes. There are elections in 2010 and in 2011 -- exactly the two years when higher taxes would apply,"

"The government is in a tight spot. On the one hand, there is an economic crisis, on the other, this is unpopular. And all this with an opposition completely unwilling to cooperate."