At the beginning of our conversation, let’s go back in time a bit. If you had the knowledge you have today six years ago about what the work of the SME ombudsman would look like, how officials would approach the Constitution for Business, etc., would you agree to become that ombudsman?
The Constitution of Business is not that bad. For example, when it comes to tax officials, as the Office of the SME Ombudsman, we have established really good relations with them. Thanks to this, the principles of the Constitution of Business were implemented by them intensively, which brought more and more positive effects year by year. I must point out here that this was mainly due to the fact that the previous management of the Ministry of Finance really saw the need to change the attitude of tax offices towards entrepreneurs. Of course, it is not ideal, there is still a lot to be done, however, since I hear from entrepreneurs themselves that tax officials and the entire National Revenue Administration act differently than a few years ago, it means that our joint work was not in vain. A large part of these officials are guided by the principles of the Constitution of Business, which was in a sense influenced by my personal relationship with the previous management of the ministry. It was so close that we sometimes resolved crisis situations by phone. When something disturbing was happening, I could call and determine what to do, what steps to take. This was particularly common when new tax regulations came into force. We managed to work out a scheme: first we train, then we admonish, and only at the end we punish if necessary. And this is how it should look in all offices. I hope that I will be able to establish similarly good relations with the current management of the Ministry of Finance and that our cooperation will be equally fruitful, to the benefit of Polish entrepreneurs and our entire economy.
And to answer directly the question of whether, having the knowledge I have today, I would still agree to become an advocate for small and medium-sized enterprises, I will say yes. I was aware of what it entailed, what awaited me and how much effort it would take to stand guard over the observance of the Constitution of Business.
Let us recall the principles of the Business Constitution.
Firstly, what is not prohibited is permitted. Secondly, the principle of the presumption of the entrepreneur’s innocence. Thirdly, the principle of resolving ambiguities that cannot be removed both in legal regulations and in administrative proceedings, in favour of the entrepreneur. Then the principle of proportionality and finally the principle of legal certainty.
You spoke about good relations with the Ministry of Finance, but what has cooperation with ZUS looked like over these six years?
In this case, the relations themselves were good, but not much good came out of them for the entrepreneurs. There was no will to cooperate on the part of ZUS…
I remembered that when you began your term as Ombudsman, I asked you what was the biggest problem for small and medium-sized businesses in Poland. You answered briefly: “ZUS”. Would the answer be the same today?
Unfortunately, yes. And that is very sad. We tried to start a dialogue with ZUS representatives, but this institution adopted the philosophy that the budget is more important than the person. The management clearly lacked the will to implement the principles of the Constitution of Business among its officials. The result was that in many cases, when issuing a verdict, ZUS officials presumed the entrepreneur’s guilt. Although the entrepreneur behaved in accordance with the law and did not break the law, he often heard, for example, that he had established a two-person company only to bypass the provision that in the case of a sole proprietorship, its owner must pay the contribution as a person running a sole proprietorship. This is not written anywhere in the law, it is only and exclusively a category of crime invented by ZUS officials, nevertheless, they issued decisions on this basis. And what is even sadder – some courts upheld these decisions. But if the courts were to overturn such decisions of ZUS immediately, it would be possible to reshape this institution more quickly into one that would be much more friendly to Polish small and medium-sized enterprises. And so ZUS supported itself with these court rulings, which was very difficult to fight. Only my persistent fight led to a change in the line of jurisprudence. This was also successful, among others, in the case of women running a business, who were deprived of the benefits they received legally.
This is about the case of women who insured themselves for a higher amount because they wanted to get pregnant and then use this higher insurance in the form of benefits. Is that right?
Yes. And here too, after my long and consistent interventions, ZUS finally abandoned such procedures, but only after winning “extraordinary complaints” before the Supreme Court. So I cannot say that I completely lost this six-year battle with ZUS, because that would be untrue. However, we all probably see that the road to repairing this institution is still very long.
What are you most proud and satisfied with as you approach the end of this six-year term?
First of all, from very difficult individual cases that we managed to win in court. Cases thanks to which we saved the achievements and perhaps also the lives of people clearly wronged by officials. An example would be an entrepreneur importing pike from Canada, whose official wanted to dispose of a batch of goods only because they were longer on the pallet than in the specification. This was due to a mistake by the Canadians, who entered the size incorrectly. We managed to save this entrepreneur from certain bankruptcy. Another example – we managed to save a man who, out of pure kindness and a desire to help one of the ecological foundations, donated tires to harden a river bank that was being destroyed by beavers. The official decided that the entrepreneur had made a dump of used tires in the forest without permission and imposed a fine of almost PLN 1.5 million on him. We also managed to help an entrepreneur who had already had his apartment auctioned for debts to ZUS. There were many such cases and they are the ones that are really the most satisfying. Because behind every such victory there is a story of a person who, without the intervention of the small and medium-sized entrepreneurs’ advocate, would certainly not have managed. That’s how it is, the bureaucratic machine has been set in motion and does not look at the consequences of this grinding.
The second reason to be proud is the fact that we have managed to change a lot in the area of legislation. Each time, we had to fight a real battle with the government or officials who came up with some act or legal regulation. We saw that the effects of such a regulation would hit one of the industries or the entire SME sector very hard, so we tried to improve them or persuade the legislator to completely eliminate the harmful regulation. And in many cases, we succeeded. Thanks to such efforts, among other things, today a small entrepreneur in the event of a dispute with a supplier is treated as a consumer, and a person who settles a flat tax pays a 4.9% health insurance contribution, not 9%, as originally assumed.
And the third thing I am proud of is the association of over 400 industry, regional and national organizations in the Entrepreneurs’ Council at the Office of the SME Ombudsman. We have created the largest communication platform in Poland for entrepreneurs, which they use very actively. I have also created the Consultative Council, in which every individual entrepreneur, not affiliated with any organization, can act without any obstacles or restrictions. It includes several hundred entities. I must also mention the Scientific Council, which was established at the Ombudsman. The response of scientists to cooperation with business was extremely positive. We have representatives of all economic universities, as well as economic departments of other universities, in this council. This is extremely important support for me.
The process of building a large community of Polish entrepreneurs from the SME sector, fully understanding their great value, their identity and their rights, is ongoing. A community that – I hope – will soon be able to speak with one common voice that no government will be able to ignore.
Has the perception of Polish entrepreneurs by offices, politicians and ordinary citizens changed during this time?
We have already mentioned the offices. When it comes to politicians, they always say before the elections that they love us, that they want the SME sector and Polish family businesses to develop as best as possible, so they are willing to give us a helping hand to make it happen. Unfortunately, practice shows that after the elections it is completely different. And this is also sad and unfortunate. It is equally sad that it has not yet been possible to change the perception of Polish entrepreneurs by ordinary citizens. In most cases, this perception is still negative. The thinking from the Polish People’s Republic is still prevalent, that a Polish entrepreneur is a thief, a black marketeer or a con artist. In a sense, this is also the fault of our entrepreneurial community, because after all, we are not all angels. Nevertheless, the vast majority deserve to be called heroes, not crooks. In countries with a long tradition of free markets, people who establish companies, develop the national economy, provide jobs and pay taxes are treated as heroes, not as potential criminals. In our country, envy still dominates the perception of entrepreneurs. If my neighbor has three cows and I have one, let two of them die. Then he will have the same as I do. In the West, thinking is completely different – if he has three and I have one, I have to do everything to have four. Then I will be better than him. We as a society have to mature to such thinking.
Is there anything that, in retrospect, you, as an SME advocate, would have done differently?
Difficult question…
Let me ask it differently – there is something that could not be pushed through: I mean the topic of voluntary ZUS for entrepreneurs. Could this topic have been handled differently to end in success?
There was never any political will to introduce voluntary ZUS for entrepreneurs. But despite this, there was a chance for this solution to come into effect. The condition was to collect 100,000 signatures for the bill. Unfortunately, this did not work out. And that it was worth it, an example is the beauty industry, which consolidated and during the election campaign offered politicians a kind of contract: you promise us 8% VAT, and we will support you in the elections. And they succeeded. So I think that if we had collected those 100,000 signatures, then today voluntary ZUS for entrepreneurs would be one of the specifics of the new government.
You are a well-liked and popular person in the SME sector. Your current term as Ombudsman will end in June. What are your plans for the future?
I would like to use the human potential that I have managed to build over these six years to create a large nationwide organization representing the Polish SME sector. There is a lack of such organizations in Poland. It would be good to establish one and actively participate in political, economic and social life.
He was talking Krzysztof BUDKA