27.06.2018

 

Let us allow the market to save our children’s education and place Polish schools at the global forefront. The Warsaw Enterprise Institute and the Union of Entrepreneurs and Employers present the report “School for life. Who will pay for our pensions?” The study under the direction of Professor Krzysztof Konarzewski includes recommendations for changes in all key areas of education: the curriculum, school system, management, and financing.

If Polish schools are to respond to the challenges of the changing world and Poles themselves are to achieve the same level of life as the richest nations, then the education system must undergo profound transformations. We must give schools greater financial independence, empower parents and the local communities, in particular local entrepreneurs, at the expense of supervision by central state institutions and municipalities. Without the introduction of elements of hard competitiveness and market mechanisms, we will never provide our children with education at the level of the fastest developing countries.

Occasional curriculum changes and arbitrary ministerial decisions should be replaced by systematic work on improving core curricula and school textbooks using new ideas and empirical data. Such continuity of work may be legally ensured by a Program Board assisting the Minister of National Education.

Polish schools need more independence and space for creative development of the youth. Key decisions regarding the didactic offer, education, equipment, and employment of teachers are made today outside the school – mostly in local or municipal education departments, which divide educational subsidies, curators and the Ministry of Education, which meticulously regulates every aspect of the schools’ activity. Nobody takes into account the specifics of each school, the differences between pupils and the development potential of given teaching staff.

We recommend:

1. Schools should no longer bed manage by local government entities, but by not-for-profit companies with their own budget and supervisory board. The company operating a school should be selected by the local government by way of public procurement. After the tender is resolved, the local government should conclude a contract with the company to run the facility.
2. A thorough change in the financing system. The school budget should consist of: a subsidy paid by the local government, grants and donations from other sources, as well as revenue from the school’s own activity. The local government would remain the owner of the educational real estate and would be obliged to keep them in proper condition.
3. Appointment of the Program Board at the Ministry of National Education, the tasks of which would include designing changes to the curriculum, analysing the results of school performance, and recommending textbooks deserving admission for school use.
4. Establishing a school supervisory board with representatives of teachers, parents, local entrepreneurs, non-governmental organisations, foundations, a university that examines the effects of teaching, sets new goals and directs changes in order to bring the school closer to local expectations, as modelled on England, Wales, and Northern Ireland.
5. Polish school should teach and demand a lot more practical skills, while resigning from excessive theoretical content. The widespread use of information technology in teaching and learning of individual subjects is also crucial.
6. Breaking with outdated and ineffective methods of working during lessons, using methods activating the pupils’ intelligence.

27^th June 2018 Agenda Poland: School for life. Who will pay for our pensions?

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The report was created as part of the “Agenda Poland” project, a joint venture of the Warsaw Enterprise Institute and the Union of Entrepreneurs and Employers, whose aim is to prepare a strategy for Poland’s development, systemic solutions, and improvement of the law in selected areas.

 

Photo. Alexas_Fotos / on lic. pixabay

19.06.2018

 

According to the report by the Union of Entrepreneurs and Employers under the title “Financing of Business in Poland”, the major way how enterprises invest in themselves is using their own funds. These include both savings from the profits made in previous years as well as the currently allocated funds. According to the available data, as many as 62% of companies from the SME sector finance their development from their own resources.

The Union of Entrepreneurs and Employers published its second report on financing of business in Poland. The subject matter is important, because it determines the level of investments made by enterprises for their very own development and modernisation of their activities. And investments obviously are necessary to maintain economic growth.

“It’s as clear as day that Polish entrepreneurs from the SME sector finance their activities primarily from their own funds,” says Cezary Kaźmierczak, President of the Union. “Fears of making serious commitments are understandable, but it seems that carrying out really large investments can’t be done without using external financial sources. That is why an appropriately tailored offer and lack of obstacles created by the legislator are such important factors for the development of Polish companies.”

The so-called external sources of financing, among which one can distinguish returnable and non-returnable funds, are beginning to play a relatively small, though growing role.

Bank loans are considered the main returnable source of finance. On the flipside, non-repayable funds include subsidies, grants, and money from earmarked funds of the European Union. Especially the last option seems to be very attractive. Only that only a small percentage of entrepreneurs believe that it is relatively easy to obtain them. As many as 43% are of the opinion that the procedure for applying for them is definitely too complicated. And among entrepreneurs who did not receive financing, although they applied for it, 72% were dissatisfied with the procedures.

The report clearly states that it would be advisable that the process of applying for subsidies from European funds could be simplified to the maximum extent. On the other hand, it has to be taken into account that the institutions that grant funds want to have control how the money is spent, hence they demand detailed reports on expenditure. A reasonable compromise would therefore be needed between the expectations of entrepreneurs and the need for supervision.

“On the one hand, there is a situation in which subsidies are granted for very dubious projects, yet on the other, complicated procedures are still a key obstacle to the use of EU funds by SMEs,” claims Jakub Bińkowski, the Union’s Law and Legislation Department Secretary.

An important, though still marginally used option of financing development and investment are bank loans already mentioned earlier. A review of credit offers of individual banks indicates that the offer is rich and diverse. It seems, however, that entrepreneurs are still very cautious about making serious commitments.

It should be noted that various forms of leasing are becoming increasingly popular among entrepreneurs. According to the data of the Polish Leasing Association, in 2017, leasing companies financed assets worth PLN 67.8 billion, and as many as 71% of entities that benefited from them were micro and small enterprises. In the first quarter of 2018, there was a dynamic increase in the use of leasing, amounting to as much as 20.9%. The majority of assets financed were vehicles and heavy transport, as well as machinery and equipment. Therefore, it seems that the leasing industry has a promising development prospect, despite the fact that as many as 52% of entrepreneurs declare that they have not used leasing so far and that they have no such intention in the nearest future.

Finally, one ought to mention a relatively rarely used option – factoring. Its popularity is gradually growing, although only 14% of entrepreneurs from the SME sector made use of it last year. It has the advantage of solving one of the main problems in running a business, namely eliminating payment blockages, which as many as 81% of micro, small and medium enterprises are struggling with. In 2017, factoring companies purchased receivables for a total amount of PLN 185 billion, which is quite a lot.

19^th June 2018 Report of the Union of Entrepreneurs and Employers: Financing of Business in Poland.

 

Photo. Helloquence / on lic. Unsplash

Warsaw, 15th June 2018

 

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON THE PROPOSED AMENDMENT TO THE PROVISIONS ON LEASING OF PASSENGER CARS

 

On 13^th June 2018, the Polish Ministry of Finance published a communiqué in which it outlined a number of tax changes planned for the coming months. The vast majority of these changes are a source of optimism –inter alia, the unification of the VAT rate matrix (the employers’ associations have been asking for such an amendment for a long time – it is necessary to end the absurd multiplication of rates for analogical products), the creation of a new Tax Ordinance Act, or the reduction of the number of reporting and information obligations that entrepreneurs are subject to. Unfortunately, it seems that the Ministry has decided to use these – undoubtedly deserving of support – announcements in order to “smuggle” among them changes that make car leasing completely unprofitable. The Union of Entrepreneurs and Employers anxiously analyses this concept and evaluates it definitely negatively.

In 2017, over 480,000 new passenger cars were sold in Poland. The increase in the number of cars sold in recent years may astonish – still in 2015, dealers were happy to exceed the barrier of 400,000 units sold, while in 2013, which was then the best in a long time, 331 thousand passenger cars were sold. Thus, in four years the number of new cars sold increased by 50%. There is no doubt, therefore, that the dynamics of market growth are powerful – they are connected both with the gradual gentrification, people more and more often decide to buy a new car from an official dealership, and – as is the case of entrepreneurs – with advantageous offers that allow car financing in a different way than purchase, such as leasing.

Regulations that are in force so far made the operating leasing of a car a very favourable solution for the lessee – the leasing instalment could be included in the costs of obtaining revenue without any limitations. Thus, car leasing was much more cost-effective than buying a car, because in the latter case it was possible to take advantage of depreciation charges included in tax deductible costs, limited to the equivalent of EUR 20,000. This way, the legislator encouraged entrepreneurs to lease, which meant that they would more willingly decide to get a new car, without having to spend a large sum of money, which they could use in a different way. Such a system was beneficial in fact for all market participants – new cars found their new owners, entrepreneurs enjoyed an increasingly modern fleet, and at the same time the money they would have to spend on buying new cars, was still at their disposal, so they could decide on other investments.

The proposal of the Ministry of Finance assumes a radical break with the above-described state of affairs. The Ministry proposes that several steps be taken:

• raising the tax allowance for depreciation by less than PLN 70,000 up to PLN 150,000;
• introduction of a limit to classify lease instalments as tax costs in the amount of PLN 150,000;
• introduction of a limit to include both lease instalments and depreciation charges in the tax costs if the car is purchased, using cars for mixed purposes (i.e. not only related to business activities) up to 50% of the car’s value.

To summarise, the legislator plans to equalise the tax effects of leasing a car with the effects of buying a new car by setting an upper limit of PLN 150,000 in both cases, while limiting up to 50% of the value of the car, the possibility of including instalments and write-offs in the costs of running a business in the event that the car is used not only for business purposes. Thus, not only the lessees, who will not be able to include in their costs the entirety of leasing instalments, will lose significantly, but also those who plan to purchase a car of a value not exceeding approx. PLN 170,000 and use it not only for business purposes. Since until now when buying a car for PLN 150,000, they could include depreciation write-offs up to PLN 86,000 in their costs. When the discussed changes come into force, they will be able to use write-offs only up to the amount of PLN 75,000 (half of the car’s value). In the same case, the lessees can now include all instalments in their costs, and after the changes, they will also be limited to PLN 75,000, i.e. the sum that can be included in costs, will be reduced by as much as half.

The proposed system significantly rewards the purchase of more expensive cars – up to PLN 300,000. In this case, an entrepreneur purchasing a car can count on the cost of depreciation write-offs up to PLN 150,000, that is almost twice as much as it is possible at the moment.

We believe that the proposed model is extremely unfair and detrimental to all market users. It remains a mystery why the Ministry of Finance decided to hinder such a dynamically growing segment of new car sales. Indeed, not only entrepreneurs (both those who sell cars and those who later use them) gain from it, but so does the state – due to the revenues from VAT, excise and other taxes. We believe that the proposal is completely absurd. One can even call it a sabotage of a thriving and dynamically developing industry. There are no rational arguments justifying the introduction of solutions proposed by the Ministry of Finance. We appeal, therefore, to withdraw from these harmful proposals and allow Poles to drive new cars – after all, the government seems to care for clean air, and there is no doubt that those are new vehicles that are low-emission ones, rather than the older ones.

 

The Union of Entrepreneurs and Employers

 

Photo: Connor Lunsford / on lic. Unsplash

11.06.2018

 

On 7^th June 2018, as part of the EU Sustainable Energy Week, a conference under the title “Shaping an integrated market with hot findings and cool solutions” took place co-organised by the National Fund for Environmental Protection and Water Management and the Union of Entrepreneurs and Employers.

Among the topics discussed during this year’s EU Sustainable Energy Week (4^th-8^th June), whose motto is Lead the Clean Energy Transition, were the necessary changes in the supply of electricity, heat and cold at the local, national, and also the entire Community levels. The National Fund for Environmental Protection and Water Management, the Union of Entrepreneurs and Employers, the Katholieke Universiteit Leuven, and the Aalborg University jointly organised the “Shaping an integrated market with hot findings and cool solutions” session and debate dedicated to the possibilities of energy saving in construction through deep thermo-modernisation, the analysis of the current situation in the heating sector, taking into account Poland’s specific situation, as well as to innovative European projects in this field.

The following panellists participated in the debate: Maciej Mijakowski from the Warsaw University of Technology, Christian Schnell from the Union of Entrepreneurs and Employers, Thomas Nowak from the European Heat Pump Association, Philip Geyer from the Katholieke Universiteit Leuven, during which they presented the energy saving potential, as well as barriers related to the use of the latest technologies and thermo-modernization of buildings. When choosing optimal solutions, especially at the national level, many environmental, economic, and social factors should be carefully considered, including the risk of energy poverty.

Brian Vad Mathiesen from the Aalborg University emphasised that energy efficiency should be a priority that does not contradict the development of efficient district heating systems.

When summarising the session, Paul Hodson, head of the energy efficiency department at the European Commission’s Directorate-General for Energy, drew attention to a very important role in shaping integrated electricity and heat markets not only by means of technology, but also through a regulatory and political framework. These include national plans for energy and climate for 2021-2030 that are to be prepared by member states of the European Union as part of the Energy Union by the end of this year.

 

Attachments:

• Heating and cooling in Europe. How Poland plans to modernise the sector by 2050 and fulfil the Paris Agreement?
• Presentations from the session

 

Photo: European Parliament/ on lic. Creative Commons/ flickr.com 

 Strasburg, 14th June 2018

 

The European Parliament voted against three mandates of the Committee on Transport and Tourism (TRAN) regarding reports on the posting of workers, driving and rest periods for drivers, and cabotage as part of the works on the Mobility Package at the Strasbourg plenary session

The mandates to negotiate with the Council were undermined for all TRAN reports adopted on 4^th June this year by MEPs Wim van de Camp, Merja Kyllönen and Ismail Ertug on the market and social aspects of the Mobility Package – drivers’ working hours, transport posting, and market access.

One of the most important issues for Polish carriers and drivers accepted by TRAN on 4^th June were the provisions on exclusion of international transit and transport from the PWD (Posting of Workers Directive). Today, during the plenary session, 343 MEPs voted against excluding international transport and transit from the rules and regulations of posting, while 263 were in favour. Of the 751 Members of the European Parliament, 630 took part in the vote.

“The undermining of three reports by MEPs Wim van de Camp, Merja Kyllönen and Ismail Ertug, democratically adopted in the TRAN Committee is bad news for at least several reasons, not only for European carriers, but also for drivers and consumers. The reports were a well-balanced compromise obtained after months of debates on the forum of the European Parliament,” commented Agata Boutanos from the Brussels Representatives Office of the Union of Entrepreneurs and Employers immediately after the vote.

The Union of Entrepreneurs and Employers actively cooperated over the last year with other trade organisations in the fields of logistics and transport, employers’ and carriers’ organisations of the European Union. We develop positions, organise events, and prepare information materials – including a brochure addressed yesterday to all 751 Members of the European Parliament convincing to support the mandate for three reports adopted ten days earlier by the TRAN Committee.

“It should be emphasised that, contrary to the assumptions of the MEPs who voted today probably in good faith against the exclusion of transit and international transport from the rules and regulations of posting, as well as the report on working and resting time, those will be drivers who might lose after this turn of events. The report offered a great deal of flexibility in the collection of rests at home, as well as transparent rules for remunerating drivers,” adds Agata Boutanos.

The possibility of submitting amendments to the reports has been opened. In line with the European Parliament’s Rules of Procedure, amendments should be voted on during the next plenary session scheduled for July.

Brussels, 5^th June 2018

 

Transit and international transport are removed from the posting of workers directive (PWD) – Members of the European Parliament Committee on Transport (TRAN) voted on June 4^th on three reports from the Mobility Package

Subject to the of the vote of the Transport Committee (TRAN) were three reports by MEPs Wim Van de Camp, Merja Kyllönen and Ismail Ertug regarding the market and social aspects of the Mobility Package – drivers’ working time, transport posting, and market access.

For Polish carriers, the most important part of the vote was the compromise amendment 6 on the exclusion of international transport operations from the PWD. A compromise on cabotage which extends the duration of cabotage operations from 5 days (proposed by the European Commission) to 7 days was also adopted.

The TRAN Committee adopted the report excluding international transport and transit by a 27 to 21 vote during yesterday’s session.

“The result of voting in the TRAN Committee is good news for the transport industry from all member states of the European Union, and a balanced compromise taking into account the needs of both drivers and carriers as well as organisations supervising them,” comments Agata Boutanos from the Brussels office of the Union of Entrepreneurs and Employers ZPP.

In the next steps, we should prepare ourselves for the plenary vote in the European Parliament, as well as come to an agreement within the Trilogues as soon as there is an unequivocal position from the EU Council.

Yesterday’s favourable vote in TRAN will help avoid the adoption of the revision of the posting of workers directive voted on last week in transport. The implementation of the posting of workers directive in relation to transport would translate into unprecedented and unjustified administrative burdens for carriers and the entire logistics industry. The result thereof would paradoxically not lead to improved employment conditions for employees, but to closing down of micro, as well as small and medium-sized enterprises, which would not be able to meet administrative requirements. The transport prices of all goods throughout Europe would also increase significantly.