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Soboń: we did not take a single zloty from the privatization of state-owned companies into the budget. NIK data contradicts this

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Deputy Finance Minister Artur Soboń stated that during the rule of PiS, no funds from privatization were transferred to the state budget. The documents of the Supreme Audit Office show otherwise.

Deputy Finance Minister Artur Soboń said on Program I of Polish Radio on June 20 that the “previous team”, i.e. the PO-PSL government, in his opinion “could not manage either Polish public finances or the Polish economy” and “did not lead to the ruin of Polish finances” only because it either led OFE (open pension funds – ed.) Then, in contrast, Artur Soboń spoke about the current government:

We did not take a single zloty from the sale of our shares from state-owned companies to the budget during all the years of our rule.

This is not the first time Deputy Minister Soboń has denied that the state budget earned money from privatization during the rule of PiS. Demagogue portal verified his similar statement from May 2021, when, as Deputy Minister of State Assets, he said: “If we look at how the construction of the state budget looked like until 2015, how much did the state budget provide for itself each year from the privatization and sale of state-owned companies, and how looks like since 2016, it looks like zero zlotys from privatization. The verifiers, based on the analyzes of the Supreme Audit Office on the implementation of the budget, assessed this statement as false.

Therefore, we check whether in the period 2016-2022 the state budget did not receive a single zloty due to the reprivatization of state-owned companies.

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Revenue from privatization in budget acts

As explained in budget lexicon available on the Sejm’s website, funds from the privatization of State Treasury assets and assets of local government units constitute one of the public revenues as revenues of the state budget.

Privatization can be direct or indirect. As explained in comment on the Sejm’s website, “indirect privatization consists in the sale of stocks and shares owned by the State Treasury. (…) Direct privatization consists in disposing of all tangible and intangible assets of a state enterprise. (…) Within the meaning of the act, privatization also includes shares/shares in the increased share capital of single-member companies of the State Treasury, established as a result of commercialization by entities other than the State Treasury or other than state legal persons”.

It was the first budget act passed by the PiS government act for 2016. In its art. 4 states that “the source of covering the borrowing needs of the state budget, including the coverage of the state budget deficit, are the funds remaining on the state budget accounts on December 31, 2015, revenues from the sale of treasury securities, revenues from credits and loans, privatization revenues and revenues from other titles” (own bold).

Almost two billion in two years

Every year, the analysis of the implementation of the Budget Act is published by the Supreme Audit Office. It includes e.g. information on privatization proceeds. IN analysis for 2016, it was stated that “privatization proceeds amounted to PLN 68.1 million, and after making the obligatory write-offs for the reimbursement of amounts due to the Social Insurance Fund from privatization, no funds remained”. Therefore, in 2016, zero zlotys were entered in the “privatization proceeds to the budget” column. In 2017, NIK he wrote about “de facto lack of privatization proceeds”, aw years 2018-2019that “there were no privatization proceeds to the state budget”.

Only in 2020 analysis states that the state’s revenues were from privatization proceeds. It was further specified that privatization revenues amounted to PLN 1.78 billion. Of this amount, PLN 713 million was allocated to the so-called statutory write-offs, i.e. transferred to the Demographic Reserve Fund and the Reprivatization Fund. After these write-offsthe balance of privatization receipts and write-downs amounted to PLN 1.07 billion– reported NIK (bolding own).

This amount came mainly from the sale of a stake of 51.5 percent. shares of Energa SA, i.e. a state-owned company, to PKN Orlen. “Revenue from this transaction was not planned for 2020” – it was noted and added that initially, privatization revenue of only PLN 2.8 million was planned for 2020.

In the next 2021, as reported by the Supreme Chamber of Control, “no entities were privatized”. Despite this, the proceeds from privatization in the amount of PLN 10.4 million were recorded, which was “a result of actions taken as part of the recovery of State Treasury receivables: court, enforcement and bankruptcy proceedings” and “payments of subsequent installments under contracts concluded in previous years”. NIK auditors calculated that “after making statutory write-offs in the amount of PLN 2.6 million, the balance of proceeds from privatization amounted to PLN 7.8 million” (own bold).

Also in analysis in the budget for 2022, there is talk of privatization revenues. They amounted to PLN 1.47 billion and mostly came from the sale of PKN ORLEN shares owned by the State Treasury (PLN 1.463 billion). Apart from this transaction, the proceeds from the direct privatization of 14 entities (PLN 1.8 million) and the indirect privatization of 11 entities (PLN 0.4 million) also contributed to the revenue. This time, the NIK auditors stated directly that after deducting the statutory deductions, the funds from privatization went to the state budget: “After making statutory write-offs in the amount of PLN 585.3 million, the state budget was credited with PLN 879.8 million” (own bold).

The NIK data therefore contradict the words of Deputy Minister Artur Soboń that “we did not take a single zloty from the sale of our shares from state-owned companies to the budget throughout all the years of our rule”. The analyzes show that only in the years 2020-2022, PLN 1.96 billion of privatization revenues went to the state budget.

Main photo source: Radek Pietruszka/PAP

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