Prof. Witold Orłowski is a professor of economic sciences, university lecturer and publicist. He serves as chief economic advisor to the PwC firm in Poland. He was also an economic advisor to the President of Poland. He engages in academic and scientific activity as part of the Independent Center for Economic Research (NOBE) and as the director of the Warsaw University of Technology Business School. He was also a rector of the Vistula Academy of Finance and Business in Warsaw, where he continues to lecture. His academic activities include macroeconomics, growth theory and European integration.

Damian Olko is an economist and associate at the WKB law firm. Previously, he worked, among others, as a manager in Deloitte's economic analyses team. He has several years’ experience in economic consulting and advisory services. He is the author of numerous analyses, articles and commentaries in the media, as well as a member of the Association of Polish Economists .

 “Better and more subsidized health care, lower taxes, higher wages and wealthier Polish families. This is the essence of the Polish Order. The government's development plan for years will help us recover from the crisis caused by the COVID-19 pandemic and make an epochal civilizational leap.” - this is a quote from the gov.pl domain. During the debate, statements posted on the government website were revised. The discussion included the circumstances and goals of the Polish Order, the amendments introduced in early July (Polish Order 2.0), as well as the anticipated consequences for Polish entrepreneurs, and the effects of the Polish Order on the economy.

The experts began by discussing the circumstances under which the Polish Order had been introduced. Prof. Witold Orłowski noted that greater tax progression was needed in Poland, however, the manner in which Finance Ministry officials  carried out the reforms as well as the timing of their introduction were inadequate and harmful to the economy. Experts pointed out that apart from severe effects of the pandemic and the war in Ukraine, economic problems were also present before the war and they were foreseeable.

“We must keep in mind the circumstances - it was already known that the war had broken out, tensions were rising. (...) Despite this, it was decided to reduce the PIT to 12%. It was not the right decision.” - Damian Olko assessed. The speaker also underlined that the taxes should be reduced  in a sustainable way.The impacts of reductions should be rationalized so that the reduction is accompanied by a simultaneous increase in other incomes or a reduction in public expenditure - only such reductions will be sustainable in the long term. The economist listed possible solutions that could be introduced together with tax changes related to the Polish Order, e.g. increasing environmental fees. Damian Olko also stated that the tax cuts introduced will not be sustainable in the current circumstances. "Now we know that we will have tax increases after the elections - it is impossible to remain within the current parameters of the system with the current assumptions," the speaker said.

The methods used to draft the law have also been criticized. “Whether this program in pratice is great and groundbreaking is a mater of debate. (...) The important thing is that these changes should always  be prepared on the basis of good analyses. If we look at the process of shaping the Polish Order, we can see there were practically no references to analyses.” Damian Olko noted that given the short time and the way in which the reform was prepared, the failure of the Polish Order 1.0 was inevitable. “In the explanatory memorandum to the law and the Regulatory Impact Assessment (RIA) there are virtually no references to research, literature and no analyses have been conducted. Moreover, the expert contribution was small, everything was done in chaos to meet the politically agreed deadlines, to the detriment of everyone - payers and taxpayers," Damian Olko said.

The government's approach to creating the bill and the lack of professionalism on the part of legislators were also criticized. The speakers emphasized that political motivations leading to the Polish Order by far outweighed the economic initiative, which had a negative impact on the final plan of the act. Prof. Witold Orłowski stated that the decision on the Polish Order had been made solely on political grounds in order to win voters’ bigger support.

Then, the speakers were asked to summerize the changes introduced within the framework of the Polish Order 2.0. Prof. Orłowski expressed concern that the program was still being treated as a purely political initiative and listed the risks involved. He noted that limiting the damage caused by the Polish Order 1.0 was carried out solely from a political angle, so as to maximally reduce the number of dissatisfied people. As a result, although budget losses seemed to belimited at first, however  after the amendment the budget deficit increased even more sharply.

Damian Olko considered whether additional money allocated to the health care system would prove to be an effective solution for the Polish health care system. In addition to underfunding, the problem of mismanagement was also raised. “There is a lot of distrust in the public about spending efficiency. There are certainly areas in health care where efficiency can be improved,” the speaker noted. The economist said that despite the fact that Poland's health care system does not function efficiently - which was particularly noticeable during the pandemic - resource reallocation reforms alone are not the solution. Damian Olko noted that Poland has one of the fastest aging populations of the developed world - the demographic structure requires increased funding. Despite this, Poland spends little on health care compared to other developed countries. The speaker assessed that increased financial outlays in the health sector were inevitable.

The experts then predicted how Polish entrepreneurs would be affected by the Polish Order. Prof. Orłowski explained that uncertainty was the biggest difficulty for entrepreneurs, and that it was not the content of the law, but the way the changes were implemented that was most damaging. “Entrepreneurs will generally pay higher taxes, however, this is the right of politicians. However, it is not right to introduce such reforms without planning - in such a way and in such a situation given that we have the lowest investment rate in history and that such an investment climate was created even before the pandemic broke out,” Prof. Orłowski said.

At the end of the debate, the effects and consequences of the implementation of the Polish Order were assessed. Damian Olko pointed out that since little time was spent for preparing the bill - there was no agreement from the political side to work on the reform - the regulations introduced do not seem to serve specific socio-economic goals, besides social justice broadly understood. “We don't have clearly defined goals, so we don't have a good basis to verify the impact of these changes,” Damian Olko said, stressing that this was the main problem in verifying the effectiveness of the reform.

Prof. Orlowski wondered what Poland's economic situation might look like in the near future, noting that he expected a drastic deterioration in the coming two - three years. The economist noted that as of today the effect of the Polish Order was impossible to predict. Nevertheless, a deterioration in public finances was inevitable.

Prof. Orłowski pointed out the social consequences of the Polish Order, i.e., among other things, the attitude of citizens toward reforms in the future. He noted that through ineptly implemented reforms, public resentment is generally built up. As a result, there is a sharp decline in support on tax reform issues. “Poorly implemented reform ties our hands for the future. Usually, at some point, the public becomes weary of economic disarray, and then allows extensive economic reforms to take place. Unfortunately, this usually happens when the public really feels negative effects of mismanagement of public finances. (...) Inflation fatigue and years of stagnation may be enough to give a mandate for major changes in the future,” the speaker assessed.