After the comprehensive settlement of foreign currency loans in the banking sector, every foreign currency debtor’s situation will improve compared with their earlier status, the Minister heading the Prime Minister’s Office said at his Thursday press conference held in Budapest, where he rendered an account of the decisions adopted at the cabinet meeting the day before. He confirmed: the proposed 2016 budget will be presented to the House next week. The Minister also informed the press about contemplated changes in taxation, including the plan that general practitioners may be exempted from the payment of the local trade tax.
János Lázár to increase publicity of public procurements
János Lázár will submit to Parliament a bill which is designed to enhance the publicity of public procurements in mid-May. The Minister heading the Prime Minister’s Office told the press that the new law, which would take effect on the first of November according to plans, will bring about genuine changes in public procurements. Mr Lázár spoke about increased publicity and transparency as the most important criteria when it comes to spending public funds.
By the Minister’s account, upon the assessment of bids, it is not always the cheapest bids that will be awarded the highest scores; job creation and the criteria of the development of the economy will enjoy particular priority, and the selection of the awarded bids will be placed on the foundations of quality.
The proposed legislation, which will equally apply to local and EU funds, contemplates more flexible procedures. It reduces the time limit of public procurement procedures by 30 per cent, restricts the range of data which may qualify as business secrets, and clarifies the criteria of conflicts of interests, disqualification and liability, the Minister cited, who also said as an example that a bid may already be submitted with a reference value of 75 per cent. In this context, Mr Lázár mentioned that one of the goals is to also enable small and medium-sized businesses to successfully participate in public procurements, and to ensure that they are not forced out by larger corporations. As the Minister reiterated, he will submit the proposed bill on 19 May; the House may conduct a debate in two sessions, and further consultations will be held in the summer.
Mr Lázár also announced that the entire public procurement system will be digitised as of the summer of 2016, at the latest; i.e. every public procurement will be conducted with the aid of e-public administration, and paper-based administration will be phased out. The Minister mentioned the exclusion of possible abuses and malpractices as one of the reasons for this measure.
János Lázár also told the press that not only the spending of state funds but also the spending of funds received from the State will be subject to public procurement from a limit of HUF 25 million, according to plans.
Improved situation for every foreign currency debtor
Mr Lázár said at the press conference that the comprehensive settlement of foreign currency debts in the banking sector and the forint conversion of foreign currency loans concern some 1.3 million customers who will, in consequence of these measures, save a thousand billion forints in total.
At the same time, the Minister added that there may be customers who are disappointed because they may feel on the basis of the settlement they received that they would have been entitled to a higher refund. The law provides scope for conducting the relevant disputes, he remarked, and reiterated that the Government has done everything it could, under the circumstances, within its power and within the boundaries that were set by the Curia. Minister of State for Government Communication András Giró-Szász encouraged those who are not satisfied with the outcome of the procedure to file complaints with the central bank.
The head of the Prime Minister’s Office also told the press that the Government dealt with the institution of personal bankruptcy at its latest meeting, and they consulted Minister of Justice László Trócsányi on the matter. The Cabinet takes the view that the relevant bill of KDNP is suitable for a parliamentary debate.
Further reduction of personal income tax on the agenda
In the context of next year’s budget, János Lázár said that the Government will present the bill on the budget to Parliament next week, which the House may pass by the end of June. Mr Lázár confirmed that, based on the Cabinet’s intentions, the 2016 budget will be a budget of tax reduction, and then indicated that the Government is planning to reduce personal income tax on a continuous basis.
The Minister said that the Government heard Tünde Handó, President of the National Office for the Judiciary, and György Matolcsy, Governor of the central bank, who stated his view on the budget and the general financial situation.
According to the information provided by the Minister for the press, the government offices were assigned the task at the cabinet meeting of organising a popular survey regarding the state administration fees to be reduced next year.
Mr Lázár also told the press that Minister of Interior Sándor Pintér was tasked with the development of an e-card system which would serve as a system for personal, social security and tax identification, or even for the verification of travel discounts.
General practitioners may be exempted from local trade tax, health care contribution of tobacco industry upheld
Municipalities may exempt general practitioners from the payment of the local trade tax as of 2016; this was another issue which the Government decided on. There are some seven thousand general practitioners in Hungary; many of them pay hundreds of thousands of forints in local trade tax, and municipalities may now waive this revenue. The Cabinet has approved – and is ready to present to Parliament – the bill on primary medical care which was drafted in consultation with local practitioners and local paediatricians, the Minister said, and remarked that the Government contributed to the operation of practices with HUF 130,000 this year, and this subsidy will also be maintained next year.
János Lázár told members of the press that the health care contribution payment obligation of tobacco industry companies will remain in force also next year. Tobacco industry companies have paid HUF 11.5 billion in total this year on these grounds, and in the future this will not be a one-time contribution but a contribution payable on an annual basis.
The Government decided to start the reduction of the bank levy in 2016 in accordance with the original agreement entered into with the EBRD. The Government hopes that financial institutions will increase the volume of their lending as a result.
The Minister also confirmed that the rate of the advertising tax will be capped at 5.3 per cent, and there will be no tax payment liability up to a sales revenue of HUF 100 million. Mr Lázár highlighted that this is a significant reduction compared with the former 40, 30, 20 and 10 percentage rates.
The Minister was also asked about Sunday closing; in answer to this question, Mr Lázár said that all the relevant issues have been debated, and they are not planning further changes. With reference to the latest consumption data, the Minister told the press that people now shop more in six days than they had done in seven. András Giró-Szász remarked in this context that, according to online cash register data, sales have increased from HUF 143 billion to HUF 151 billion since the entry into force of the Sunday closing law.
In answer to a question concerning Russian President Vladimir Putin’s statement, based on which the cancellation of the agreement entered into with Russia on the enlargement of the Paks atomic power station would harm Hungary’s national interests, János Lázár said that he did not perceive Putin’s statement as a threat. He takes the view that this is a realistic remark on the fact that Hungary struck a good deal.
Major health care equipment procurements to be conducted
The head of the Prime Minister’s Office was also queried on issues concerning health care. In his answer, Mr Lázár spoke about the Government’s goal to restore the “insourcing” of laboratories and diagnostic tests operated in state hospitals by private service providers. He mentioned CT scans and dialysis stations as examples. There should be state services in state hospitals, provided with state equipment, he summarised the overall objective, and remarked that this is not designed to restrict private services offered outside state hospitals. This contemplated “insourcing” would be made possible, he carried on, by the health care asset procurements worth HUF 100-150 billion planned to be made from EU funds this year.
Regarding the debt consolidation of hospitals, the Minister said: the available funds will be sufficient to pay the outstanding debts. In answer to a question, Mr Lázár also said that he is in favour of the re-inception of a separate veterinary university.
(Prime Minister's Office/MTI)
