In an interview with public broadcaster Kossuth Rádió, Prime Minister Viktor Orbán summed up the 2016 budget in the following words: “Everyone can take a step forward’.

The Hungarian economy is showing stable growth and the country’s development can be clearly planned, so the Government aims to adopt a budget which “allows everyone to take a step forward: individuals, families, workplaces, companies and the country itself”, the Prime Minister said. He added that the goal is to make work as financially worthwhile as possible, and by 2018–2019 to achieve an unemployment rate of under 3 per cent – which counts as virtually full employment. A means of achieving this is the plan in the draft budget for reduced taxation, he said, as with these measures more and more people can be attracted into the labour market.

Tax cuts represent wage increases, Mr. Orbán said. He added that the Government plans to establish a career path model for civil servants,and there are also serious discussions on a career path model for employees in the welfare sector.

According to the Prime Minister, the fact that next year’s budget can be adopted by the first week of July is an important economic achievement, as this can serve to increase predictability and the capacity to plan ahead.

Talking about the planned cut in VAT on pork, Mr. Orbán said that it is still uncertain what impact it will have in terms of revenues; according to some it will not lead to lower revenues, due to the measure’s tendency to draw transactions away from the black economy. He added that he is aware of voices calling for similar tax cuts on poultry as well, and understands and agrees with them. However, he said, “we cannot take two steps at a time […] We are willing to do so, and if the economy continues to grow, we can continue with poultry”.

Answering a question on reduction of the banking tax, Mr. Orbán said that this is a process with two or three phases, following which the Hungarian banking tax will still be the highest in Europe; in return for the reduction, financial institutions will increase their lending activity. “We will keep our word, and we will see if the banking sector reciprocates. After that we can see how to proceed”, he said.

Talking about compensation for the victims of recently revealed brokerage scandals, he explained that it is not yet known how big a burden this will be on the banking sector, and that although there is debate on whether or not it contravenes the EBRD agreement, he does not want to judge the matter. He said that the banks have a point, but it has to be admitted that financial fraud in the money markets has been going on for decades, and to some extent professionals must have been aware of some companies’ unreliability.

The Prime Minister mentioned the case of a government background institution (TIG Reserve Managing Non Profit Ltd.) which had caused the state losses of HUF 400–500 million. The organisation kept the money at a brokerage firm, in violation of a regulation which states that no public money can be “parked” at such institutions. He said that steps have already been taken in the case, but the investigation has not yet been concluded.

Talking about Jobbik’s victory in the Tapolca by-election, Mr. Orbán said that the result warns us that there is no such thing as a permanent election victory, that looking to the future a two-thirds victory does not guarantee anything, and that one must repeatedly work to gain people’s trust and support.

At the same time he emphasised that in Hungary there is stability, and there is no form of political danger threatening the agreement made with the Hungarian people.

(Prime Minister's Office/MTI)