Orbán government announces action plan with 21 measures, Magyar’s Tisza Party only 2% behind Orbán

The government approved an economic policy action plan with 21 measures at a cabinet meeting on Wednesday, Gergely Gulyás, the head of the Prime Minister’s Office, said at a weekly press briefing on Wednesday.

Gulyás said the pillars of the new economic policy action plan prioritised boosting the purchasing power of working Hungarians, ensuring affordable housing and supporting small and medium-sized enterprises.

The minister said it was necessary to introduce new economic policy tools, and while there was “growing willingness” in Brussels to interfere in such areas, the government rejected such attempts, noting that the cabinet has decided to launch a National Consultation public survey, at the request of the governing parliamentary groups, on the main elements of the new policy.

Hungarian voters will thus get the chance to weigh in on new policy tools aimed at boosting economic growth, he said, adding that such decisions should not be taken in Brussels.

Photo: MTI

Gulyás said the foundation of economic growth was Hungary’s policy of trade neutrality rather than joining trade wars, adding that Hungary would not comply with “Brussels diktats” on doing business exclusively on an ideological basis.

He declared that Hungary welcomed investments “from everywhere, from the West and the East”, adding that it was of prime importance that technologies emerging in the Hungarian economy “are among the best in the world”. “If it’s American, it’s American, if it’s German, it’s German, if it’s Chinese, then it’s Chinese,” he said.

The government’s economic action plan targets economic growth of 3-6 percent in the coming years, with growth benefiting the broadest possible swathe of society, especially Hungarian families and small enterprises.

Also, the government wants to conclude a wage agreement, preferably for 3 years, with employee and employer interest representatives, and it targets a big increase in minimum wage levels in line with the goals of the Hungarian economy, he said.

An employee loan program will be launched, and the personal income tax discount for employees with children will be doubled, by 50 percent on July 1 next year and by another 50 percent on Jan 1, 2026.

Gergely Gulyás in the Tisza Castle in Geszt briefing press after the government meeting finished. Photo: MTI

Other measures include building more dormitories for students in higher education, launching a national housing programme for young people and one for home renovations in rural areas. In addition, savings from voluntary pensions will be opened up for use in housing on an optional basis.

A tax discount on housing support provided by the employer will be maintained until the end of 2026, he said.

Meanwhile, Gulyás warned that Budapest faced a “serious a housing problem”, and the capital was responsible for solving it. Budapest’s administration, he added, had inherited reserves of more than 200 billion forints from former mayor Istvan Tarlos but had so far failed to “deal with this problem”.

Airbnb regulations will be tightened

The government has plans to tighten regulations of Airbnb, he said, though before a final decision was taken, it would be necessary to assess the extent to which Airbnb contributed to growing rents in the capital. And whereas flat rentals and related contracts were also in the government’s sights, there was no desire to follow “communist practices” seen in some western European countries, and the government fully respected property rights, he added.

The minister also listed new measures such as a capital financing and stimulus schemes for SMEs and financial support for digitisation. Further, Eximbank will relaunch its loan scheme aimed at incentivising exports, while a new investment programme will also get under way in cooperation between Eximbank and National Capital Holding, he added.

Meanwhile, the government wants to speed up EU programmes and payments aimed at SMEs and curb red tape with such measures as raising the value threshold of mandatory audits and dropping audits for micro companies. He called SMEs “the backbone of the Hungarian economy”, and boosting them would aid the goal of increasing wages, boosting the economy and protecting jobs.

Moreover, Hungarian economic growth should be outstanding in the region and in the EU as a whole in the coming years, the minister said.

In response to a question, Gulyás said the new National Consultation survey will have 11 questions, and the government will start announcing them this week. The questionnaires themselves will be sent out in the first half of November and people will have until Dec 20 to send them back, he added.

Gulyás said he would “surprised” if the left welcomed the public survey, arguing that they had “attacked” all of the past National Consultations.

Fines imposed on Hungary

Asked about the progress of Hungary’s talks with Brussels on the fines imposed on the country for its refusal to take in migrants, Gulyás said the government has appointed János Bóka, the European affairs minister, to conduct the negotiations. He said the talks were “a bit difficult” given the ongoing change in EU leadership. Gulyas said Hungary wanted to reach an agreement as soon as possible, “but it’s not yet clear as to what the commission is open to in this regard”.

Asked to comment on an image the European People’s Party (EPP) shared recently on social media featuring Prime Minister Viktor Orban in front of a red background with text that reads “Time to go”, Gulyas said only Hungarian voters had the right to decide who should be in government, as they had in 2022. He added that Hungarians last expressed their opinion on the country’s political parties in the European Parliament elections.

Gulyás said none of the EPP’s member parties had achieved a result as strong as Fidesz’s in the EP election, adding that the EPP party leaders had more of a reason to quit than the Hungarian prime minister.

He said the EPP and the European Commission had announced that they wanted a different government in Hungary, but the Hungarian electorate disagreed. Hungary, he added, had been a democracy governed by the rule of law since 1990 so that the question as to who governs it was not decided in Brussels, Washington or Moscow.

Gulyás said the EPP and the EC president had launched “a direct attack” against Hungary, adding, however, that Hungary maintained “constructive cooperation” with the commission’s president in a number of areas. Hungary’s responsibility, he said, was to observe and enforce the EU treaty and to remind the EC that it could not take any negative measures against Hungary in the event of any legal proceedings.

Asked to comment on two Dutch parties having proposed the suspension of Hungary’s Schengen membership, Gulyás said this was “not realistic in any way”.

He said there were far fewer Russian citizens working in Hungary than in Western European countries, and Hungary only issued visas after conducting national security screenings.

Albania should be EU member

Concerning migration, he said the number of attempts at illegal entry on the southern border were down 30 percent so far this year.

As regards Albania’s EU accession, Gulyás said Hungary has long been an advocate of EU enlargement in the Western Balkans, adding that it was in the bloc’s interest to ensure the possibility of EU membership for the whole of Europe. He said Hungary welcomed that it could facilitate progress on accession talks and close and open accession chapters as the president of the Council of the EU. Hungary’s interest lay in Serbia and the other Northern Balkan countries becoming EU members as soon as possible, he added.

Put to him that Brussels and most EU member states could not be relied on when it came to the competitiveness programme, Gulyás said Hungary was counting on everyone. He said Hungary wanted the EU to adopt a declaration on competitiveness at the Nov 7 EU summit in Budapest.

He lamented that when it came time to make practical decisions related to competitiveness, member states often “fall victim to ideological debates or completely flawed ideologically-driven green policy”.

Regarding the situation of the Hungarian minority in Ukraine, Gulyas said that the rule of law only existed in the EU as a political weapon against “countries they don’t like”.

Minority rights at 2015 levels in Ukraine

Minority rights in Ukraine are yet to return to 2015 levels, he said, adding that there was barely a minority the EU was not standing up for, bur indigenous minorities were not among them.

Vitalyos said that reports of Foreign Minister Peter Szijjarto being shunned by EP committees was “fake news”, adding that the meetings had fallen through due to scheduling issues.

Asked about a report on Péter Magyar, an MEP and leader of the Tisza Party on commercial channel TV2, Gulyás said that while government ads were running on all channels, the government had no intention to interfere with programme content. The Value and Quality award had been awarded to the channel’s Tenyek (Facts) programme last year, before the report had been broadcast, he added.

Commenting on fresh polls showing that the opposition Tisza Party was neck and neck with ruling Fidesz (IDEA Institute measured only 2% between them), Gulyás said the country and the government needed “calm, determined planning and decision-making”. Surveys had shown the opposition ahead in the autumn in 2021, before the 2022 election, and Fidesz won that election with a 20 percent margin, Gulyás said.

Surveys conducted long before the elections serve political ends, he said. “The government is also taking polls, and we are very calm.”

Put to him that Magyar had recently said he would “give up parts of Hungary’s sovereignty”, Gulyás said “he has done that several times”.

When it entered the EU, Hungary accepted the requirements of the EU treaties. “There is no need to cede more sovereignty than that; rather, we should take back as much as we can,” Gulyás said.

Ambitious minimum wage and average salary plans

At the same time, Gulyás said the EU was not abiding by the treaties, but was rather trying to take back as many competencies as possible. He also said that the concept that Hungary should “let go of anything” so that it can access EU resources was mistaken. Hungary was entitled to those monies, he said.

Regarding the 1,000 euro minimum wage and the 1 million forint gross minimum wage, Gulyás said the government was going to set a deadline within weeks. They are in the midst of negotiations with employers and employees on the next three-year agreement, he said.

The government’s 21-point economic action plan will cost hundreds of billions, he said. Next year’s growth is expected to be 3 percent at the least, “but could go as high as 4 or even 5 percent,” enough to cover those costs, he added.

Asked about resources to fund the investments aimed at easing the housing shortage, Gulyas said the problem was primarily Budapest’s, and that the municipality had very limited opportunities to use EU funding. If they drew down the full sum, it would still be insufficient, “so the relevant regulations and international practices must be reviewed”, he said. At the same time, he said: “I’m not a fan of communist solutions” such as rent control.

Asked about reports that the debts of hospitals had surpassed 100 billion forints, Gulyás said that hopefully, the 12.5 billion monthly surplus “would keep the health-insurance coffers in balance”.

Regarding corporate taxes, Gulyás said the government and localities support the aim that “parts of the tax should be used regionally, although there are debates as to the implementation”.

Commenting on the possible effect of the US election on directions of Hungary’s budget for next year, Gulyás said that if Donald Trump was re-elected, the war in Ukraine would come to a “swift end”. “And there isn’t an economist who would dispute that such a development would bring economic growth to Hungary and to Europe as a whole.”

Good Trump-deal

Meanwhile, “threats by a non-elected administration to introduce protective tariffs in some sectors” is an issue the EU “can handle if it wants to”, Gulyás said. “Making a good deal with Donald Trump is possible.”

Asked about the purchase of more Russian gas, he said it would be primarily used to serve households and economic purposes came only second.

Gulyás acknowledged the need of revamping the outdated carriages of Budapest’s suburban railway HEV or purchasing new ones. He noted the government’s plans to spend 2 billion euros on upgrading Hungary’s railway system and purchasing new trains over the coming years. “Talks are under way about a 1 billion euro loan also with the European Development Bank which the government would match with the same amount.”

Concerning a recent interview Hungary’s foreign minister gave to a Russian state news agency and in connection with which the minister had said that his words “had been twisted,” Gulyás said he had no information that the issue might have diplomatic consequences.

Asked about recent press reports suggesting that Hungary might host aircraft suitable for carrying nuclear bombs at its military airbase in Kecskemét, Gulyás said that no such request had been received. “Should such a request arrive, the government would request parliament’s position on an issue of this scale.”

Asked about plans to expand the powers of the Sovereignty Protection Office, he said that the government had not made such a decision, adding that in his opinion the office would not need to be assigned powers of authority.

Hungarian minister’s anti-Semitic post?

In response to a question on the House of Fates museum, Gulyás confirmed that “the project is off the agenda”. He said Hungary already has a Holocaust memorial centre which also functions as a museum. Gulyás argued that although the government had a different plan, it could not set up a museum commemorating the child victims of the Holocaust in absence of a consensus among Hungarian Jewish organisations.

Asked about a recent Facebook post of Construction Minister János Lázár, Gulyás said he struggled to grasp “how anyone could see that post as anti-Semitic.” The accusations levelled at the minister and the government were “unfair”, he said.

Gulyás confirmed that Prime Minister Viktor Orban will deliver a speech on the October 23 commemorations at the Millenaris centre at 11 o’clock.

Asked about the planned reopening of a dolomite mine in Csobánka near Budapest, Vitályos, the MP of that constituency, said such a project in a nature protection area was “outrageous”. “It is quite understandable that the local government, the residents and nature protection groups say that the project must not be authorised,” she said, adding that they would work to thwart the reopening with all available legal means.

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