October 7, 2019 / 8:27 AM / 12 days ago

Poland's ruling right-wing party banks on child subsidy to win election

NOWA KARCZMA, Poland (Reuters) - Maria Kolsut will be thinking about her financial security when she votes for Poland’s ruling right-wing party in Sunday’s parliamentary election.

Karolina Burczyk, 26, walks her son Leon on a street in Nowa Karczma, Poland, September 11, 2019. Picture taken September 11, 2019. REUTERS/Aleksandra Szmigiel

The mother of three is not a fan of all policies pursued by Law and Justice (PiS). She is worried by its judicial reforms, which the European Union’s executive says threaten the independence of judges.

But she will put her qualms aside because of a child subsidy which has made her better off than before PiS came to power in 2015.

Kolsut, a factory worker in the northern town of Nowa Karczma, receives 500 zlotys ($127) a month for each of her children. The combined 1,500 zlotys from what is known as the 500+ subsidy is roughly equivalent to the minimum monthly wage.

She no longer has to struggle to pay her utility bills and buy clothes.

“I sleep soundly,” Kolsut, 35, said as she watched her daughter Lena and friends celebrating her seventh birthday at an indoor play area she hired for the occasion. “I am pleased with the (PiS) family policies.”

The subsidy, which is not means-tested and not indexed to inflation, is seen by PiS as vital to its appeal to working-class voters.

Promises to introduce the subsidy helped PiS return to power in 2015, when its socially conservative and nationalist agenda tapped into public frustration with Western liberal values.

Critics say 500+ is populist, costly to the economy and reinforces a stereotypical image of women. But pollsters say it has contributed to a big lead for the PiS in opinion polls.

A comfortable election victory would give PiS a mandate to further reshape Poland in its conservative image. A close race could force it to rein in some of its ambitions and make it harder to stand up to EU pressure over the rule of law.

“DIGNITY FACTOR”

In the 2015 election, the then governing centre-right Civic Platform (PO) won in Nowa Karzma’s voting district, but PiS won 54% of votes there in a European Parliament election in May.

“Our region is very family-oriented,” said Karolina Burczyk, a 26-year-old accountant. “More people used to vote for PO but now PiS is more popular.”

Weighty issues such as judicial reform, under which judges could ultimately face sanctions over rulings deemed inappropriate, are simply “removed from reality” for many voters, she said.

The child subsidy, introduced in April 2016, was meant to help 2.7 million families in the country of 38 million people. Economists said it was expected to bolster the economy by fuelling consumption, at least in the short term.

It has cost more than 70 billion zlotys. But it is the first time since communist rule ended in 1989 that Poland has handed out money that does not stigmatise recipients as being poor, and has won over working-class Poles who previously felt they had seen little benefit from the transition to free markets.

“Suddenly they feel at home in their country, something they may have not felt in the past, or they felt they were being treated unfairly. There is a dignity factor here,” said Pawel Marczewski, an economist with the Stefan Batory Foundation in Poland.

Anna Osowska, who is 34 and has five children, is happy she no longer has to apply for emergency social funds each month.

“I don’t have to go, borrow, ask social services to help,” she said.

Osowska, who does not work, had never voted before 2015, but she backed PiS in 2015 because of the promised subsidy.

“REPRESENTATIVES OF THE WEAK”

About 14% of the workforce earns the minimum wage, and human resources firm Sedlak & Sedlak said about 98% earn less than the average wage in Germany, the EU’s economic powerhouse.

“We are the representatives of the weak, those who have been hurt and who today I hope see and know that they have won back their rightful place in society and in Poland,” Prime Minister Mateusz Morawiecki told a party convention.

Critics say the policy is part of a nationalist agenda that includes stigmatisation of sexual minorities and a push back against Western liberal values.

Some say it exposes public finances to too much risk and removes the incentive for some women to work. Others rue its impact on Polish politics.

Slideshow (4 Images)

“When you have aggressive populists as in the case of PiS in Poland, then opposition parties are thinking how would they respond,” said Leszek Balcerowicz, a former finance minister, told Reuters. “And most of them respond by saying that they would keep it, so populism, aggressive populism, tends to poison the political scene.”

Spending on social protection for families and children has risen under PiS from 1.5% of GDP in 2015 to 2.7% in 2017 - above the EU average of 1.7%. Consumer Price Inflation Consumer Price Inflation reached its highest point since 2012 earlier this year.

While ratings agencies expect increased social spending to widen the budget deficit, they are not concerned enough to cut Poland’s credit rating, recently affirmed by Fitch at a sound “A-“.

Editing by Justyna Pawlak and Timothy Heritage

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