“Reducing bureaucracy is aimed at increasing the country’s competitiveness and increasing its economy”, the Minister of Prime Minister’s Office said in an interview with Hungarian news agency MTI. János Lázár summed up the basic principle behind reducing bureaucracy with a quote from Elbert Einstein: “The state is our servant and not we its slaves”.
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According to the head of the Prime Minister’s Office, the high level of bureaucracy is the reason why, while the competitiveness of the other Visegrád Group countries is continuously growing, in Hungary this growth is less dynamic. He believes the state has grown too fat, so it is slow and beginning to lag behind in the competition, he said. Less bureaucracy also means an improvement in our competition position internationally, he stated.
The continent’s competitiveness reserves are in the Central European region, and accordingly in Hungary the number of bureaucratic institutions and officials, as well as the number of pieces of legislation regulating each area, must be reduced to enable GDP growth to remain around 2-4 percent after 2018, he added.
The Minister told the press that other countries operate with a significantly smaller state apparatus and Hungary must also achieve the V4 or European average within this field.
The state of affairs whereby some 20 percent of the workforce are employed by the state is unsustainable, while their ratio is less than 10 percent in Poland and lower than 13 percent in the Czech Republic, Mr. Lázár declared.
For this reason, the Prime Minister’s Office is proposing the introduction of a new government model in which central state administration, strategy development and decision-making fall within the sphere of authority of Ministries while regional-level public administration will be the task of regional and local government offices.
The efficiency of the district and government office system introduced as the first phase of the reorganisation of the public administration system is by now obvious to everyone. The new government windows will make administration cheaper, faster and simpler.
The problem within the state organisation is primarily not at the bottom, but at the top, and moving upwards the state becomes increasingly large and opaque. Most civil servants work for one of 90 institutions involved in central state administration, he added, pointing out that this was why he has put forward a proposal for the reorganisation of 73 institutions employing a total of 50 thousand people.
“Today, it may increasingly seem that instead of Ministries having background institutions, the background institutions have Ministries”, he noted, citing as an example one of the agencies of the Ministry of Agriculture, which employs more people than the Ministry itself, or the 600-strong Education Office, whereas the State Secretariat for the sector only employs 50 people.
Institutions whose maintenance is expensive and superfluous will be closed. In future, their duties will be performed by the ministries or regional government offices, although we are still in negotiation with the various ministries regarding the details, he added.
For instance, the National Health Insurance Fund will continue operating as part of the Ministry of Human Capacities or the Ministry for National Economy, Mr. Lázár said, highlighting the fact that the change in structure will not mean the given institution will cease to perform its duties, only that those duties will be provided by the state within a cheaper and simpler framework.
Decisions with regard to background institutions will be made by this summer. Next under review will be state-owned corporations, he stated, adding that he would also be making a proposal for the reduction of staff numbers at the Prime Minister’s Office.
According to Mr. Lázár there needs to be a 10-15 percent reduction in staff at district and local government offices in two phases by 1 July of this year and 1 January 2017, meaning a reduction in staff numbers from 36 thousand to 30 thousand within a little less than a year.
Staff numbers at background institutions that are to become incorporated into Ministries are expected to fall by 20 percent by 1 July, while the Prime Minister’s Office expects next year’s budget to include a further 15 percent reduction at the various Ministries. The money saved will remain with the Ministries and could fund later pay rises that encourage more effective office work, Mr. Lázár stressed.
The Minister admitted that in the case of district and regional government offices this would mean more duties for fewer people, but indicated that the district offices are still under development and a total of 270 new government windows will have been opened by May.
Mr. Lázár also mentioned the civil servants’ career model, as a result of which a series of pay rises totalling 50 percent will begin from July of this year. Next to receive salary increases will the local government office workers in 2017, while the reorganisation of background institutions will enable pay rises for civil servants at municipal level, he said.
The Minister also spoke about the fact that the Government will be providing several opportunities for those who are dismissed. According to one of his proposals, those who leave voluntarily during the second half of the year could receive an increased pay-out of 5-10 million forints each if they undertake not to seek employment at a government agency or state-owned company within ten years and instead put their knowledge and experience to good use in the private sector, with relation to which the Government is in continued negotiations with private sector representatives.
According to Mr. Lázár, those who leave the public sector now will have a good chance of finding a job elsewhere in view of the low level of unemployment. To facilitate this, the Government is also launching a program called Career Bridge 2 within the framework of which it will be giving subsidies, allowances or tax breaks to employers who take on former civil servants. The positions of retirees will also not be filled, he added.
(Prime Minister's Office/MTI)
