Issues

The government attacks bill to double child allowance

The government simply doesn’t have a solution – or, in other words, it doesn’t have a clue where to find the money – to double the child allowance, so they are hoping the Constitutional Court will free them from the binding promise, Prime Minister Ludovic Orban announced on Monday.

The bill, which was initiated by the Social Democratic Party (PSD), was adopted on December 18, 2019, and announced by President Klaus Iohannis in mid-January this year. On that day, he also said that “This money was not budgeted, so the government must find a solution.”

Fast-forward to today, and the solution is still missing, so the government is now desperately looking to stop the binding commitment. Apparently, the Orban-led government’s best option is to attack this bill in the Constitutional Court, alleging that “this is a project lacking financial sources,” a strategy that has snagged several victories for them before.

Interestingly, none of the credit ratings firms have pointed to this law as something that would seriously impact the country’s budget. The biggest burden, they say, is the 40 percent hike in state pensions scheduled for September.

Orban says that increasing child allowance is only possible progressively, but there has been no word about scrapping pension hikes, yet, which leads us to assume that they plan to proceed with the rise. That means there will be a significant burden on the budget, as there were 5.13 million pensioners at the end of the first quarter of 2020 who will claim an average pension of RON 1,423, up 0.8 percent from the previous quarter, according to the National Statistics Institute (INS).

That compares to 4.138 million children, of which those aged 0-18 years currently receive a monthly child allowance of RON 150 (EUR 30) and infants up to 2 years old receive RON 300 (EUR 60). Per the bill that the government is now attacking, the first group would be entitled to a monthly allowance of RON 300 (EUR 60), while infants up to 2 years of age would receive RON 600 (EUR 125). But apparently, the government doesn’t want to give them this “luxury,” because they don’t represent a voting base. By raising pensions, on the other hand, the Orban-led party may secure a few votes, and they need them desperately because the liberal party’s popularity is dropping at an accelerating rate.

Title image: Boys reading. Image source: Pixabay

Author: István Fekete