editorial partner: Liberte! Friedrich Naumann Foundation
Economy

The State Spends More than Poles Think

The State Spends More than Poles Think

Poles do not know how much and on what the Polish state spends their money. Meanwhile, the structure and size of public spending have a direct impact on their daily lives by influencing the level of taxation and the availability of public services.

On behalf of FOR, Kantar TNS, a market research agency, conducted a survey of a representative group of Poles asking them about the amount of public expenditure, its structure, and the amount of taxes. It was conducted on April 6-11, 2017, using direct Computer-Assisted Personal Interviewing (CAPI) on a sample of 1067 people nationwide, representative for Poles aged 15 and over. Respondents were asked three questions:

1. [the size of state expenditures]: The total annual expenditures of the Polish state amount to hundreds of billions of zlotys. How do you estimate the annual state expenditure per citizen?

2. [the structure of state expenditure]: The Polish state finances a number of different expenses from the taxpayers’ money, such as pensions, health care, administration, social welfare, education, roads. Please rank these items in order from those on which the state, in your opinion, spends the most to those on which it spends the least.

3. [income taxation]: if someone on a contract of employment earns three thousand PLN net, approximately how much do you think is paid by the employee in taxes and contributions?

Respondents who answered the question about the size of state expenditures per capita underestimated it, believing that it is two times lower than in reality. Most people (65%) were unable to estimate the amount of public spending at all, and of those who tried, three-quarters expected it to be under PLN 10,000 per capita per year. In reality, it amounts to over PLN 20,000.

The citizens’ ignorance allows politicians to make irresponsible promises about increasing pension expenditure (by lowering the retirement age and introducing 13th pensions). Yet pensions account already for one-third of the expenditures. Only 14% of respondents knew this.

Moreover, 26% of respondents incorrectly pointed to expenditure on administration as the largest expense of the state, while in reality it amounts only to 5% of total expenditure.

The impenetrability of the tax system makes it difficult for citizens to assess the amount of tax they pay. On a contract of employment and a salary of PLN 3,000 net, there is in total PLN 2,000 of taxes and contributions, artificially split into PLN 1,200 paid by the employee and PLN 800 by the employer. When asked about the amount of taxes and contributions, 73% of respondents answered “I do not know.”

Only 3% of the respondents answered correctly to the question dealing with the contributions paid by an employee, and 7% related to the contributions paid by the employer.

The percentage of the correct answers to the main questions (about the size of state spending, the largest category of state expenditure, and contributions and taxes on employment contracts) remains low regardless of party preference. Nevertheless, the majority of the correct answers were provided by the supporters of Partia Wolności (Freedom Party, Janusz Korwin-Mikke’s party): 22%, Ryszarda Petru Nowoczesna (Modern Party of Ryszard Petru, associated with ALDE): 12% and Partia Razem (Together Party, far left party): 9%, i.e. three relatively smaller parties attracting mostly urban voters.

In the final analysis, it is up to voters to shape the policy of the state, so it is important to raise the awareness of citizens on issues which are crucial for further development of Poland. For the further economic growth of our country, public finances (that is how much and on what the Polish state spends) are of great importance.