Puppet Parliament

We are used to the fact that our parliament is not an autonomous source of legislative power, but merely a puppet in the hands of the government. Thus, a vast majority of the government’s propositions are comfortably passed by its parliamentary majority. Not all of them of course. Exceptions exist, and they are worthy of a detailed review. Is it possible that these rare cases of the parliament’s deviation from the government’s will are perhaps some unexpected signs of independence? If the parliament’s adjustments always improved the original proposition, this optimism would be justified. Unfortunately, that is not the case. The result is often somehow worse than the original proposal. This is because the impulse for an occasional modification of a government proposal often comes from outside the parliament – from various lobby groups.

Back in August, when the amendment to the accounting law was passed, among other things, it modified which and how many entities are obliged to have their financial statements audited. The entrepreneurs rejoiced, but the auditors and audit companies were seriously alarmed. This was because the government commendably wanted to lower the number of business entities affected by this obligation, making their life a little easier. But lower number of subjects obligated to buy audits means fewer clients for companies offering this service.  The Slovak Chamber of Auditors therefore resorted to phrases like „raising the threshold would endanger the whole nature and existence of the audit profession“. And apparently, they didn’t stop there. I presume that their agents rolled up their sleeves and went themselves to the parliament hill. They ultimately succeeded in pursuing their desired goal – rejection of the said proposal. The situation turned around perfectly. Audit companies rejoiced and entrepreneurs could cry their eyes out.

The fact that a small but specific initiative aimed at lowering the often unnecessary administrative and financial burden of companies failed is not the only problem. The main problem is the fact that that the 30% of entities that were originally meant to be relieved of this obligation, will have to continue buying audits. For this, they will spend from thousands up to tens of thousands of euros. Money, which they could undoubtedly use more effectively. Not to mention the fact, that the original proposal was a compromise, and that the European legislation would allow for it to go even further.

It is bad when a parliament is a puppet in the hands of a government. But when it is in the hands of narrow interest groups that do not care about anyone else, following the „charity begins at home“ philosophy, it gets even worse. The result is a redirection of a significant amount of resources in the economy from productive use to financing parasitic endeavours. To avoid a misunderstanding, the compulsory audits themselves are not going to break the neck of the Slovak economy. But the numbers of such “vampire” schemes are increasing. And if we do not do anything about them, they will suck out even the last drop of blood from our economy.

Translated by Jakub Jablonický

Jan Oravec