Warsaw, 23rd August 2023
Opinion of the President of the Union of Entrepreneurs and Employers:
I defend micro-enterprises because nobody else does!
Micro-enterprises will neither unionise (they are struggling for survival) nor will they raise funds for lobbying and representation (they have no money and do not trust anyone). In other words, there is no money or prestige in microbusiness. As it happens, I don’t care about either, so I can deal with this issue simply for the good of humanity.
Defending micro-enterprises: it does not translate into waging war against corporations (unless we consider the postulate that they pay honest taxes… fighting them). Corporations are essential and necessary in any country’s economy (unlike monopolies which should be prohibited by law). Corporations have contributed a lot to the reconstruction of Poland over the last three decades. They should not, however, be favoured – for example by means of voluntary income tax, as is the case with CIT in Poland.
State aid for corporations is a complex issue – for instance: the recent case with Intel. I would be against it… if other countries didn’t do it. In any case, such aid ought to be conditional, depending on the future benefits and proceeds from such an investment. If we are to pay extra for this in the foreseeable future, let them build their factories in Hungary, the Czech Republic or on the Moon – it doesn’t have to be here.
In any case, I did not and do not advocate restricting the freedoms or battling corporations (except monopolies). Let them prosper for the good of the Republic of Poland!
Nonetheless, what I do call for is for the government to stop fighting micro-enterprises in Poland, which based on shoddy slogans and propaganda has been happening for 30 years owing to insufficient knowledge or understanding. The frontlines of these hostilities against the Polish “economic anthill” are vast – from the Ministry of Finance and the Ministry of Development, through the government-owned Polish Economic Institute, the Foundation for Civic Development, Leszek Balcerowicz and prof. Jerzy Hausner. They all believe that microbusiness should be repelled, because it hinders economic development, micro-companies are non-innovative, create little to no added value, have low productivity, and are even responsible for most of the tax gap and tax fraud.
At the same time, none of them can give an example of how a dough puncher baking traditional baker or a tailor sewing classic suits and dresses should be innovative. Some of the sillier politicians want to give them the so-called “small ZUS”, that is preferential social security, for the period of 4 years. Because – according to them – after 4 years, they should transform into a large company. The stupidest slogan in this domain, repeated by politicians, is: “We want micro-enterprises to become small, small to become medium-sized, and medium-sizes to become large companies.”
Without any doubt this can be true in some cases. After all, both Amazon and Google were founded in a garage – but there are exceptions. There is no reason or need for a florist, baker or plumber to expand, be innovative, and transform into a big companies or corporation. The economy and society alike need them at the exact size they are. Naturally, a small percentage of these microbusinesses will one day become large companies, but these are exceptions. For every unicorn, there are a million failed projects. One must realise that running a business is a bit more difficult than distributing election pamphlets, which then get one elected to the position of deputy minister, so that one can give talk rubbish about the economy, without the faintest idea about it. Out of ten newly established companies, five will survive the first year, and only one will make it past a decade.
This madness and obsession with “development and innovation” is vividly reminiscent of another lunacy dating back to the times of Leszek Miller’s government, when this preeminent statesman and Krystyna Łybacka decided to starve and destroy vocational education in the name of “universality of teaching”. Everyone was to have a “higher education”, and Poland paid an exceedingly high price for this delusion. More than 15 years ago, politicians realised what had happened, and the first reconstruction of vocational education in Poland was undertaken by Joanna Kluzik-Rostkowska. After her, regardless of party affiliation, every subsequent minister has been trying to manage it, but despite their efforts, it has still not been possible to restore it the state from before Miller and Łybacka’s folly.
The very same threat now looms over bakeries, flower shops, tailors, small finishing and construction services, and all other micro- and small businesses. If you destroy these small companies with mindless tax burdens, it will take decades to rebuild them. It is worth stopping when there is still time – the number of towns where there is nothing but just one office, a gas station, and a supermarket is growing rapidly.
The role of micro-enterprises is not only social, but also of great economic importance: micro-enterprises employ more people than corporations, they contribute more to the GDP than corporations, and only thanks to them we have a positive trade balance with foreign countries. But that’s a whole other story and I will publish data related to it regularly.