Is the Polish government’s ‘500 plus’ child subsidy a political game changer?

by Aleks Szczerbiak

Given that it will have a direct and clearly identifiable impact on many Polish families, government supporters are hoping that its flagship ‘500 plus’ child subsidy programme will be a political game changer. However, the political impact of this popular but very costly social reform could be diluted by more controversial issues where the government is on the defensive.

Delivering on its flagship election promise

As the Polish government – led, since last October’s parliamentary election, by the right-wing Law and Justice (PiS) party – marked its first hundred days in office, this month saw the signing into law of its flagship ‘Family 500 plus’ programme. The 500 złoties per child monthly subsidy, which will take effect in April, will be available for every second and subsequent child in all families as well as for the first children of poorer households earning less than 800 złoties per month (1200 in the case of disabled children); embracing some 2.7 million families with 3.7 million children in total. Although ‘500 plus’ is one of the most significant changes to the Polish social welfare system since the collapse of communism, its primary objective is to re-shape the country’s demographic and family policy. Poland faces a demographic time bomb as Poles are living longer while fewer women are giving birth to decreasing numbers of children; according to the Central Statistical Office (GUS) the country’s population is set to fall by 3.1 million (compared with 2014) to 34.9 million in 2050. The government claims that its ‘500 plus’ programme will increase the Polish birth rate by 278,000 over the next decade.

‘500 plus’ was one of Law and Justice’s key, high profile election promises, alongside pledges to: reverse the deeply unpopular increase in the retirement age to 67 (from 60 for women and 65 for men) introduced by the previous government led, by the centrist Civic Platform (PO) party; and raise tax-free income thresholds to 8,000 złoties. During last year’s election campaign, Law and Justice focused on these socio-economic issues, rather than its traditional priority of re-constructing the Polish state; although the latter remains at the core of the party’s programme. By helping to persuade more moderate, centrist voters to support the party, these pledges were critical to Law and Justice’s stunning election victory, as it became the first political grouping in post-1989 Poland to secure an outright parliamentary majority, and its earlier success in the May 2015 presidential poll when its candidate Andrzej Duda defeated Civic Platform-backed incumbent and odds-one favourite Bronisław Komorowski. Given their political significance, it is vital that the new government is seen to be delivering on these pledges as quickly as possible, especially its flagship ‘500 plus’ programme.

The opposition is uncertain and divided

Opposition parties have been uncertain and divided on how to respond to ‘500 plus’. During last year’s election campaign, Civic Platform, which is now the main opposition grouping, tried to present itself as a fiscally responsible party warning that if Law and Justice implemented its social spending pledges then Poland would face a Greek-style budget crisis. The cost of ‘500 plus’ is estimated at 17 billion złoties in 2016 and 22-23 billion per annum in subsequent years. However, in one of his first major decisions as Civic Platform’s new leader, Grzegorz Schetyna reversed the party’s previous policy and instead tried to outflank Law and Justice by arguing that ‘500 plus’ should be extended to include all children regardless of household income. In doing so, the party claimed that Law and Justice had betrayed its election promise to introduce the subsidy ‘for every child’. While Law and Justice’s programmatic statements were very clear that ‘500 plus’ would only encompass the first children of lower-earning households, in some election debates and campaign speeches party spokesmen, including prime minister Beata Szydło, implied that the subsidy could apply to all children.

Undermining Law and Justice’s claim to be delivering on its election promises may bring Civic Platform some short-term benefits; interestingly, a survey conducted by the Pollster agency for the ‘Super Express’ daily suggested that two-thirds of respondents felt Mrs Szydło had not kept her word on ‘500 plus’. However, by advocating a policy that would double the programme’s cost, Mr Schetyna has further damaged the party’s hard-won fiscal credibility among its one-time core liberal electorate. At the same time, Civic Platform is unlikely to win the backing of those voters favouring greater social welfare spending, for whom Law and Justice will always be more credible, especially given that Mr Schetyna’s party has had eight years in office during which to introduce such a programme.

On the other hand, ‘Modern’ (Nowoczesna), the smaller liberal opposition grouping led by economist Ryszard Petru, filed amendments proposing the inclusion of better-off single parents with one child in the programme but excluding families with per capita income above 2,500 złoties. When these were rejected, it was the only party to vote against the subsidy arguing that ‘500 plus’ was not the most cost-effective way of channelling government support to Polish families. This means that, unlike Civic Platform, Mr Petru’s party is well placed to benefit if the government proves unable to secure the budget revenues that it is counting on to finance ‘500 plus’ and its other social spending pledges. However, although the party’s support has grown in recent months, and it has pulled ahead of Civic Platform in several polls, Modern’s greater programmatic coherence may actually limit its electoral appeal as experience suggests that the social base for pure economically liberal parties is relatively narrow in Poland. Ironically, Civic Platform’s much weaker ideological underpinnings gave the party much greater reach across the political spectrum and had helped it to garner the support of a very broad coalition of voters united mainly by their dislike of Law and Justice.

Is ‘500 plus’ a game changer?

For sure, many Poles are sceptical about whether ‘500 plus’ will help to boost the country’s birth rate significantly and even its supporters admit that programme only represents a first step, albeit an important one, in reversing Poland’s negative demographic trends. But will ‘500 plus’ be the political game changer that Law and Justice are hoping for? Many of the party’s supporters feel that the previous 2005-7 Law and Justice-led administration did not derive sufficient political benefit from the fact that it lowered income and payroll taxes, and pushed through a tax relief package for families, because the impact of these policies was too diffuse. ‘500 plus’, on the other hand, is simple and easy for Poles to grasp, and many of them will see a direct and clearly identifiable financial impact on their family budgets. It will certainly provide a significant boost to low income families, particularly those who live beyond the large urban centres and feel frustrated that they have not shared sufficiently in the country’s recent economic growth. Indeed, a February 2016 survey conducted by the CBOS polling agency found that 80% of respondents supported ‘500 plus’, including 62% of ‘Modern’ voters and 65% of Civic Platform supporters, while only 15% were against. Moreover, by being seen to deliver on its flagship election promise (even if many people feel that it has done so only partially), Law and Justice has strengthened its credibility among its own voters, particularly those persuaded to support the party because of social policies like ‘500 plus’.

However, there is a risk that ‘500 plus’ – and, for that matter, the government’s other social spending policies – could be eclipsed by other, more politically problematic issues. Immediately after it took office, the new Law and Justice government found itself on the back foot following claims by its political opponents that some of its actions – notably a dispute over the membership and functioning of the constitutional tribunal (a powerful body that rules on the constitutionality of laws) and a new media law allowing the government to directly appoint the heads of public broadcasting – undermined the fundamentals of Polish democracy and the rule of law. The government’s supporters denied these charges vigorously and defended its actions as necessary measures to restore pluralism and balance to state institutions that they say had been colonised by supporters of, and milieu associated with, the previous Civic Platform-led administration. Nonetheless, the government’s actions drew heavy criticism from the Western opinion forming media and EU political establishment, with whom the opposition enjoys close links and many of whom are ideologically unsympathetic to Law and Justice, culminating in the European Commission’s unprecedented January decision to launch an investigation into Poland under the EU’s ‘rule of law’ mechanism. Some polling suggested that the political turbulence surrounding these controversies had a negative spillover effect on public support for the government’s other policies, even those that were widely assumed to be popular such as ‘500 plus’. For example, a January survey conducted by the Ariadna agency found that support for ‘500 plus’ fell from 53% in December 2015 to 41%, while opposition increased from 40% to 47% over the same period.

As the constitutional tribunal crisis and controversy over the new media law assumed a lower profile, the government was relieved to see a return to more ‘normal’ patterns of politics with voters starting to once again evaluate parties through the prism of ‘bread and butter’ issues such as the ‘500 plus’ programme, where Law and Justice feels it is more in tune with public opinion than its liberal and centrist opponents. Moreover, while the ruling party has a large number of opponents – many of whom were prepared to take to the streets last December in demonstrations organised by the Committee for the Defence of Democracy (KOD), an opposition-backed anti-government civic movement – it also retains widespread support which appears to have stabilised in recent weeks. For example, a January CBOS survey found that 35% of respondents supported the government while 32% opposed it and 27% were neutral. Moreover, in spite of the fact that Poles support their country’s EU membership overwhelmingly, a January survey by the IBRiS agency found respondents evenly divided (47% in favour, 47% against) on whether or not the EU was right to launch its ‘rule of law’ investigation into the state of democracy in Poland. In fact, Law and Justice’s support has, if anything, hardened among its core electorate and, as the ‘Pooling the Poles’ micro-blog that aggregates voting intention surveys shows, the party retains a clear lead in the polls averaging around 36% support compared with 22% for Mr Petru’s party and 17% for Civic Platform.

Will its political impact be diluted?

Nonetheless, while the government is keen to ensure that political debate remains focused on socio-economic issues such as ‘500 plus’, the constitutional tribunal crisis is very likely to re-surface in March. The tribunal expects to rule on the constitutionality of amendments to the law determining its functioning passed by the Polish parliament at the end of last December; which the government argues have already come into force and the tribunal has no power to review. At the same time, the European Commission has said that it will also return to the issue of democracy in Poland next month after the Venice Commission, an advisory body of the Council of Europe (a non-EU organisation which aims to uphold democracy and the rule of law), issues an opinion on the country’s constitutional tribunal reforms. The danger for Law and Justice, therefore, remains that, however popular social spending programmes like ‘500 plus’ may be, their political impact could be diluted if they are once again overshadowed by, and subject to negative spillover effects from, other, more controversial issues where the government is on weaker ground and the political and social forces ranged against it, both domestically and internationally, are much stronger.

Advertisements