NIK on family policy

The demographic situation of Poland is alarming. The size of the Polish population has fallen systematically in the past twenty years. The birth rate does not guarantee simple replacement of generations. The year 2013 was particularly bad - there were 15 thousand more deaths than births and the total fertility rate (TFR) was 1.26. For a sustainable demographic development it should be 2.1. If the current trends maintain, in 2060 the population of Poland will go down from nearly 39 million to about 32 million. The population structure will change as well: there will be more pensioners and fewer children in 45 years. As a consequence, one third of the working age population will work for the other two thirds: children and pensioners. Another factor is economic emigration, mainly of young people - it is estimated that about two million people have already left Poland.

For NIK the situation is critical because the guarantee of stabilisation and social safety resulting in the birth rate increase is the most urgent task for the Polish state. Apparently, Poland has no family policy in place. There is no fully-fledged or strategic planning of pro-family measures. The solutions offered by subsequent governments - such as the newborn allowance, children's tax reliefs or the one-year maternity leave - are more of ad hoc nature and do not improve the situation in any significant or noticeable way. The absence of coordination or comprehensive planning gave rise to a peculiar situation: in 2012 the support of families was one of the key priorities defined in the State’s Long-Term Financial Plan. They were removed from the priority list in 2013 - announced as the Year of Families.

The family policy is run in a similar way. Various ministries take pro-family efforts on their own but no minister is responsible for coordinating them or treating them as a whole. Each minister accounts for his or her part only.

The family policy funds are not used as they should be. According to estimates, about 2 percent of GDP goes to the family policy which is nearly as much as goes to defence. Though, it does not have any noticeable impact on the birth rate increase or on the families’ development. The birth rate went up slightly in 2014 which seemed to be the effect of the paid one-year maternity leave or changes in the tax system. The tendency was short-term, however. By the end of April 2015, over a thousand children less were born than in the same period last year.

The Poles are not glad with the family policy. The TNS research done at NIK’s request shows that the citizens find the efforts taken by the state as ad hoc actions, addressed only to the families with children, mainly large and low-income families. The respondents underlined that they did not expect the newborn allowance or other children’s benefits. For most Polish families the state should guarantee economic safety and provide workplaces for young people in the first place.

The Polish family policy is run first of all on a cash basis. The main actor here is the Minister of Finance who decides how much money will go to family support and to which activities. According to NIK it should be the other way round: first of all, the family policy objectives and priorities as well as the ways of implementing them should be clearly defined. Only then necessary funds should be allocated to them.

Nevertheless, there is no single family policy document in Poland. That makes it difficult to define its scope and - what follows - the amount of public funds for that purpose. The calculations that are made are only estimations and their results vary, mainly due to different calculation methodologies used. In 2014, the Ministry of Labour and Social Policy developed the first study defining the scale of public expenditures for families with children. It shows that in 2012 over PLN 32 billion was intended for the support of families with children and of children themselves. After including the healthcare expenditures in that amount, it exceeded PLN 42 billion which is nearly 2 percent of GDP. The Minister of Finance has different data. They say that the state support given to families in 2012 in the form of tax reliefs totalled over PLN 36 billion.

The data provided by external organisations vary as well. According to estimates made by the Organisation for Economic Cooperation and Development (OECD) the family policy outlays in Poland represent about 1.8 percent GDP, whereas according to the European Statistical Office (Eurostat) it is only 1.3 percent of GDP, which positions our country at the bottom of the European table. NIK states that considering the great number of methodologies, the real amount of family policy expenditures remains unknown.

According to NIK, the Eurostat data may imply that the effectiveness of pro-family efforts depends not only on how much money is spent on them but above all on the quality of solutions used. For instance, the data show clearly that although the Czech Republic spend less money on family policy, the Czech have a higher fertility rate. On the other hand, Hungary earmarks for family support over twice as much money as Poland and yet fewer children are born there. The above may indicate that to make sure the family policy translates into a higher birth rate Poland may not necessarily need more funds. A major overhaul may be needed instead: looking into Poland’s spending habits, eliminating ineffective solutions and replacing them with better ones.

Family policy expenditures and TFR in elected EU member states in (source: Eurostat)

Conclusions

According to NIK it would be justified to look into all the government policies and legal acts in Poland, as it is the case in some other EU countries, and view them in terms of their impact on the Polish family. At the end of the day, it is about the state focusing on the good of the family.

The issues identified by NIK in the area of family policy coordination in Poland reveal the urgent need for a fundamental change. NIK is of the opinion that each minister should undertake a separate family policy programme but one minister (e.g. the Minister of Labour and Social Policy) should be responsible for their coordination and monitoring, including evaluation of their effectiveness.

Considering the urgent need to develop the family policy framework in Poland,  the Minister of Labour and Social Policy should take immediate steps to:

• develop assumptions of the long-term and comprehensive family policy of the state that will be the basis for an optimum system of support, setting of objectives, priorities and real financing sources in specific timeframes and will define proper metrics to track the progress of activities,
• develop framework for the settlement of the family policy, e.g. by identifying the family policy expenditures or establish a long-term programme with the spending limit for its implementation (in cooperation with the Minister of Finance).