Government would not exclude introducing sectoral windfall taxes

Asked why Prime Minister Viktor Orbán’s first official visit abroad had been to the Vatican instead of Poland, his usual first port of call after being reelected, PM chief of staff Gergely Gulyás said Orbán was honoured to be received for a private audience by Pope Francis, and this did not indicate that Poland would play a lesser role in Hungary’s foreign policy, “regardless of the currently significant differences in opinion”.

Meanwhile, Gulyás said that Máté Kocsis will head Fidesz’s parliamentary group in the new assembly. He declined to respond to questions concerning the new cabinet. Gulyás did say, however, that there were no plans to set up a dedicated health ministry or education ministry.

Commenting on health care, he said a series of important changes had taken place in the course of consultations with the medical chamber: parliament approved a law on the new legal status of doctors and their wages grew by an unprecedented degree in the last government term.

Gulyás said government spending on family support, the highest in proportion to GDP in Europe,

would continue and would be guided by demographic considerations rather than the public finances. The government remains open to expanding this kind of support, he added.

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In response to a question on price caps, he said that before taking any decisions, their effect on sectoral revenues and the national economy would be assessed first. Decisions will be made on the basis of complex economic calculations, and talks will be held as early as next week on caps on food prices, he added.

Commenting on utility price caps, he said it was difficult to project how long current market prices would remain in force, but the government had a plan concerning the resources needed for their financing. The cabinet has not yet dicussed sectoral windfall taxes, Gulyás said, but he did not exclude the possibility of levying them.

In response to a question regarding the arrest of several finance ministry officials suspected of graft, he said five people were in custody, a department head the highest ranking among them. He added that minor cases of fraud had been allegedly committed, and one of the department heads at the prime minister’s office was also a suspect.

Gulyás said that disputes and “moralising” about Russian gas purchases were senseless because stopping such purchases would bring both the Hungarian and the German economies to their knees.

Commenting on oil, he said it was necessary to assess how Russian oil purchases could be replaced. The switch-over of the oil refinery in Szazhalombatta would take several years and cost several hundred billions of forints, he added.

Meanwhile Gulyás referred to the extraordinary diffculties that members of the Hungarian community in Transcarpathia face. While the Hungarian government had spearheaded humantiarian aid and aid shipments, incitement against Hungarians in Transcarpathia was ongoing and pre-dated the war, he said.

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Gulyás said it was hard to tell how many refugees would remain in Hungary, adding that a few tens of thousands of jobs were available in the country and it was likely that people who were able to work would choose to stay. Regarding the public finances, he said the 2022 budget would be amended in light of inflation but the details would have to be worked out beforehand. Amendments will be made in the spring session of parliament, he added, notwithstanding the complications connected to setting up a new government.

If the 2023 budget is approved in the upcoming period, the amendment of the 2022 budget will certainly also be put on the agenda, he said. Responding to a question regarding

the possible renationalisation of Budapest’s Ferenc Liszt International Airport, he said the government wanted to go ahead with the plan, “though the conditions of financing must be established first”.

In response to a question regarding the EU’s rule-of-law procedure against Hungary, Gulyás accused “Brussels” of acting undemocratically “in many respects”. “However, member states do [act democratically], offering significant support for Hungarian opinions,” he added.

Gulyás insisted any disputes did not concern the rule of law but were political in nature, and he also accused certain MEPs and European commissioners of waging “lawfare” and

copying the reports of organisations funded by financier George Soros as part of “a political battle”.

Even if an agreement cannot be reached on the EU recovery fund in time, the government does not plan to witdraw any tenders, he said.

On the subject of Covid, Gulyás said the government planned no further restrictions.

The school-leaving exams at the end of the academic year will be held as normal, he said. If cases in September increase to previous peaks, the government will mull further steps, but the forecasts do not point in that direction, he said.

Commenting on a statement by Csaba Horváth, the mayor of Budapest’s 14th district, that further austerity measures may be in the pipeline in the city, Gulyás pledged the government’s continued financial support for Budapest. At the same time, he insisted that the city’s income from corporate tax had turned out to be “more than anticipated and more than ever before”, so its financial situation was better than ever.