The increase of the minimum wage and the reduction of work-related contributions together may result in a 40 per cent pay rise, János Lázár, the Minister heading the Prime Minister’s Office said at the press conference Governmentinfo 71 which he held jointly with Government Spokesperson Zoltán Kovács.
Mr Lázár pointed out at his press conference held on Thursday in Budapest that the reason for his statement is the wage agreement concluded during the course of the day which determines measures to be implemented over the course of several years, and in consequence, the increase of the minimum wage combined with the reduction of work-related contributions may result in a 40 per cent pay rise.
A condition of this is that there should be full employment and a functional workfare society in Hungary, he added. Mr Lázár said that the increase of the minimum wage will concern some one million people in the corporate sector in 2017 and 2018.
Almost 200 thousand people work for the minimum wage in the state sector, and consequently, the wage agreement is important for 1.2 million people in total, he detailed. He also stressed that the agreement further provides for the reduction of the contributions payable by employers, in addition to the pay rise.
Now finally, after 25 years, the reduction of work-related contributions has begun, he said. He added: there is currently a 28 per cent contribution liability which they would like to reduce to 13-14 per cent. Mr Lázár said that in the next few years they will review the pay rises that will be implemented, and any further reduction of work-related contributions will be subject to these.
According to his information, the pre-tax minimum wage will be HUF 127,500 next year, compared with HUF 111,000 at present, while this amount will increase by eight per cent to HUF 138,000 in 2018. The guaranteed wage minimum will increase from HUF 129,000 to HUF 161,000 next year, and to HUF 180,500 in 2018, he said.
The Minister told the press that the reduction of work-related contributions will also continue beyond 2018, as in the agreement the parties agreed upon an annual two per cent reduction up to 2022. He said: the most important result of the past decade is that a right-wing government has succeeded in reaching a wage agreement for many long years in cooperation with the employers and workers.
It is a major achievement that Fidesz has managed to accomplish this because it is the left-wing parties that usually „blah-blah-blah” about pay rises, but nothing ever happens, he said. In his view, the wage increase has been made possible by the fact that the Hungarian economy has significantly gained in strength in recent years.
Europe is weakening, its economic prospects are unclear. Compared with this, Hungary is stable, and there is a crystal clear economic situation, he said, adding: it is the economic environment consolidated „in its very foundations” that has created the basis for the agreement.
Mr Lázár told the press that 4.4 million people are in employment in Hungary today, the Government has consolidated the budget, and the sovereign debt is on the decrease. If Parliament so decided, the budget could even be approved with a zero deficit, he added. In answer to a question, he said that the Prime Minister will have another round of talks with pensioners regarding the pension rise next week.
Government insists upon four items
The Hungarian Government insists upon four items in the EU debate on the resettlement quotas, the Minister heading the Prime Minister’s Office pointed out. Mr Lázár said: they can only accept a proposal which does not prescribe mandatory quotas, regards the protection of borders in the EU as an important element, does not allow the long-term operation of internal border control points, and defines solidarity according to each country’s own culture, identity and possibilities.
In the context of the latter, he said: they would like the EU to regard the external border protection expenditures, any programmes launched in the issuing countries and the promotion of the setting up of hotspots as also part of solidarity. If the European Commission approves this, Hungary is ready to cooperate, he said.
The Hungarian Government and, among others, the Polish Government, too, share the view that migration should not be organised, but stopped, while Germany and others would prefer to legitimise immigration, he said, stating in summary: it will be difficult to build a bridge between the two views, and they expect a major debate. At the same time, he welcomed the fact that the Visegrád Four agree on the assessment of the issue.
The Minister also announced that the Government approved HUF 53 billion on Wednesday for border protection responsibilities, including, inter alia, the operation of the border fence, payments to personnel, equipment for the police and the military, and infrastructure. He remarked: so far HUF 150 billion has been spent on such purposes in total.
New legislative package on penal proceedings to be presented to the House
The Government will submit a new bill on penal proceedings to Parliament in January, the head of the Prime Minister’s Office informed the press. Justice Minister László Trócsányi presented the Code currently in the making to the Government after two years of consultations which will hopefully be based on a wider social consensus. Mr Lázár stated that the purpose of the legislation is to accelerate and improve the efficiency of proceedings, and to reinforce victim protection.
They will initiate a five-party consultation regarding the proposed law. The package will be submitted to Parliament in January, and the legislation may enter into force in the summer of 2018, he said.
The Minister was also asked about the interview with former Quaestor executive Csaba Tarsoly. He said in reply: the former executive who is currently in detention awaiting trial is a common thief, and he pays no attention whatsoever to his criticisms. He added: reading the interview, one has the impression that, according to Csaba Tarsoly, everyone is responsible for the bankruptcy of the brokerage firm, except himself.
„He will gradually claim no less than that Jesus Christ is responsible for the fact that Quaestor went bankrupt, rather than admitting how many tens of billions of forints he stole” and giving the money back, he said discarding the statements made in the interview as the empty accusations of a man who has been in prison for a long time.
He was further asked about the Duna City project mentioned in the interview which – according to his claim – Tarsoly was going to implement together with Saudi businessman Ghaith Pharaon. The Minister said: there was no mention of such a project at any government meeting. Regarding the fact that press reports described the Pharaon case as an open secret service game, he said: he would recommend some herbal tea with a calming effect to everyone, as an entire spy novel is slowly unfolding before our eyes. He does not give credit to these rumours, and the events of the case were fully explored at the meeting of Parliament’s Committee for National Security.
The Minister was asked for his position regarding the dispute between Tamás Gyárfás, the head of the Hungarian Swimming Federation, and several swimmers. He confirmed the communication of State Secretary for Sports Tünde Szabó, who took the view that they have a vested interest in settling the matter within the shortest possible time as it jeopardises the success of the World Aquatics Championships and the related developments. He added: the Government does not wish to influence the debate.
Mr Lázár was further asked about the bill on museum institutions which currently lies before Parliament. He said in justification of the bill that György Károlyi and his wife have been given use of the Károlyi Castle in Fehérvárcsurgó, which they rebuilt from their own resources, for a period of 99 years.
The original owner’s descendant would like to have restored to him the possession of two oil paintings by Gyula Benczúr depicting his great-grandmother and great-grandfather which were provably on display in the castle. However, the State purchased them earlier from a presumed thief, and they are therefore currently exhibited in the Nyíregyháza museum. The legislative amendment serves to permit the restoration of the two works of art to the great-grandson’s use.
Government is ready to engage in talks with Austria
Mr Lázár said that should Austria choose to turn to the European Court of Justice on account of the Paks atomic power station project, Hungary will acknowledge this, but Hungary would rather propose the joint formulation of a consultation mechanism.
He said: the Hungarian Government is ready to work out a consultation mechanism together with the Austrian Government, within the framework of bilateral cooperation, which would enable Austria to acquaint itself with all data, information and construction works related to the project Paks II which seeks to maintain the power plant’s capacity.
It would be desirable if our Austrian neighbours opted for a consultation mechanism, instead of going to court, he added, remarking that if Austria does go to court, it has no delaying effect on the project.
The Minister said: he is optimistic that they will be able to form good cooperation with the members of the Austrian Government. He indicated that they respect the consensus of the Austrian political parties on the issue of nuclear energy.
The Minister reiterated that the EU infringement procedure instituted in the case of the Paks atomic power station has been closed, and the investigation launched on account of prohibited state aid, too, may be brought to a conclusion in December. In his view, construction works may start „in earnest” in 2017-18.
He said that the Hungarian Government reached an agreement with Russia because Russia’s offer was the most favourable money market offer with respect to the power plant project. He added: Hungary, however, insists upon early repayment, and the regular reviewing of the interest terms. The competitiveness of the Russian facility must be continuously scrutinised, he explained.
Mr Lázár pointed out: now that Hungary has been upgraded, the Government must explore the relationship between the interest conditions of the facility offered by Russia and the new market conditions. „We shall examine whether if we were to take out this facility today”, it would still prove to be competitive, he said.
He further told the press that the European Commission made it clear in September 2015 that the project complies with all EU standards in a technical sense. He asked Member of European Parliament Benedek Jávor to exercise greater circumspection when he files his next reports against Hungary.
Mr Lázár also spoke about EU agricultural grants. He said that all the calls for proposals will be published next spring, but by mid-summer, at the latest. Calls for proposals worth HUF 984 billion have been published to date, accounting for 76 per cent of the entire allocation, 42 calls for proposals in total, he detailed.
He said that the responsibilities of the Agricultural and Rural Development Agency will be taken over partly by the Prime Minister’s Office, and partly by the State Treasury as of January. He told the press that there are problematic issues regarding the functioning of the agency. He added: more than 80 staff members of the agency stand accused in a case involving fictitious aid, and the tax authority, too, has instituted criminal proceedings on account of fiscal fraud.
(Cabinet Office of the Prime Minister)
