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The proposed percentage budget for culture (excluding film) for 2015 falls for the first time below the level of half a per cent out of the total public budget.

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Czech Republic/ 4. Current issues in cultural policy development and debate  

4.3 Other relevant issues and debates

Since 2008 funding for culture at the state level has continued to decrease each year, but the decline is more and more also affecting the local and regional level. Debates and the development of new civic initiatives revolve around financial issues, but also around the lack of transparency in the tender procedures for so-called priority activities at the MC, the grant selection procedures at the municipal level, or the selection procedures for appointing directors of cultural institutions (see also chapter 7.3).

The year 2014 saw the sixteenth change in the post of Minister of Culture since 1989. The swift succession of alternating ministers in recent years was accompanied also by a large turnover in personnel occupying lower posts in the Ministry of Culture and has had the effect of disrupting continuity and strategic thinking at the MC. Compounding this has been the annual decrease in the amount of resources directed into the sector of culture.

In its Programme Declaration in February 21014, the new Government of the CR declared, among other things, its intention to move in the direction of earmarking one percent of the public budget for culture (for more on this, see chapter 2.3). Nevertheless, a month later, instead of increasing funding for culture, there was a further substantial decrease in the proposed budget resources for 2015. The share of expenditures for the culture sector itself (not including the areas of churches, European funds, and the budget for film incentives) out of total public budget expenditures in this proposal fell for the first time below the level of half a percent (0.47%). The final structure of the public budget however is still in the stage of negotiations.

The year 2014 also ushered in a fundamental change connected with the new Civil Code (Act No. 89/2012 Coll.). The old Civil Codewas replaced with an entirely new set of legislation that unites all the legislation in the area of civil law into a single code. As soon as the new Civil Codecame into effect the Commercial Code (Act No. 513/1991 Coll.), for instance, became a thing of the past.

The newCivil Codeis thematically divided into five sections: General Section, Family Law, Absolute Property Law, Relative Property Law, and Common, Temporary and Final Provisions. The General Section contains definitions of the terms used in the Civil Code. Family Law encompasses the current legislation on the family, including marriage and relations between family members. Absolute Property Law contains definitions of property, usufruct and inheritance issues. Relative Property Law is more expansive and includes various types of contracts and tort obligations (including liability for damage). The last section deals primarily with technical legislative matters, including a note of which existing legislation is voided by the introduction of the new Code (see also chapter 5.1.5, chapter 5.1.6, and chapter 5.1.10).

This complex situation has not benefited either from the fact that there has been a substantial increase in VAT in recent years. Since January 2012 the lower VAT rate rose from 10% to 14%, the list of items subject to VAT remained unchanged. The basic rate remained at 20%. The rate was supposed to be changed to a uniform 17.5% from January 2013. However, in the end the government agreed to increase both rates by just one percentage point, from 14% to 15% and from 20% to 21%. The dramatic increase in VAT in recent years has had a huge impact on the cultural sector because many items were originally subject to the lower VAT rate. The new government in 2014 promised that the lower VAT rate would be re-introduced from January 2015 at 10%, which would apply to children's food and books as well as medicine, and it was introduced as promised (see also chapter 5.1.5).

In 2012 the long-awaited revival of the State Cultural Fund of the CR took place (see also chapter 3.2 and chapter 5.3.8). The amended Act on Audiovisual Works and Support for Cinematography that the Government passed in July 2015 has a fundamental effect on the fund’s financial sources. According to this act, an annual subsidy will be paid into the State Cinematography Fund from the state budget in support of cinematography and the amount of the subsidy will correspond to the amount of revenue collected from audio-visual fees (see  chapter 5.3.8). The second major change is to the system and process by which support for cinematography and incentives for filmmaking are provided. Cinematography is currently one of the most successful fields in terms of budget increases.

In 2012 Act No. 428/2012 Coll., on Property Settlement between the State and Churches and Religious Societies was passed. In order to rectify certain injustices impacting on churches and religious societies and to enable them to operate independently under this legislation the state shall engage in a gradual combined property settlement with churches and religious societies, in part through the natural restitution of original church property now owned by the state, and in part through the payment of financial compensation and the gradual withdrawal of funding for the wages of priests and other expenditures of churches and religious societies. This is a long and gradual process that will impact and alter the entire area of public expenditure in the CR (see also chapter 6.2.2).

In 2015 the Government of the Czech Republic adopted the new State Cultural Policy for 2015-2020, which also includes a number of financial and legislative measures. The Ministry of Culture is seeking to put through legislation pertaining to public (i.e. non-commercial) institutions in culture that would simplify the operations of state and municipal cultural institutions. Czech public cultural institutions, and foremost among them the Association of Professional Theatres, have long been seeking the introduction of legislation on public institutions on culture. This legislation ought also to address the long-discussed problems of semi-budgetary organisations in the field of the arts (see chapter 5.2).

Chapter published: 28-01-2016

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