Daily News Hungary economy

Budapest, April 20 (MTI) – Next year’s budget, the draft of which is to be submitted to the Fiscal Council on Thursday, is targeted at people who make a living as employees, János Lázár, head of the government office, told his weekly press conference.

Lázár said the 2018 budget will focus on “employment, support for families and security”. He added that “when Fidesz is in government there is no election budget”.

Concerning actual measures in the budget proposal, Lázár mentioned reducing VAT on fish and internet services to 5 percent.

He confirmed that the government targets an economic growth rate of above 4 percent, a budget deficit of 2.4 percent of GDP and a public debt-to-GDP ratio of 72-73 percent. Around 80 percent of the budget will go towards running the country and 20 percent towards economic development, he said.

Lázár added that next year’s tax laws and legislation supporting the budget, as well as an amendment to the 2017 budget, will also go before parliament. This year’s budget needs to be modified to reflect wage hikes, lower employment-related contributions as well as revenues from state-owned land sales, he said.

The budget is expected to be submitted to parliament next week and the national assembly will vote on it before June 15.

Speaking about the project to upgrade Hungary’s sole nuclear power plant in Paks, he said the investment was not dependent on a loan from Russia and could be financed from the country’s own coffers or from other loans which “may even be cheaper” than the Russian one. Preparatory works for the upgrade will cost 100 million euros, and Hungary has the option of financing from the budget, the Russian loan or through the issuance of government bonds to be underwritten by an international consortium. The Government Debt Management Agency and the Economy Ministry will have to choose the fiscally optimal financing method, he added.

He said there were no obstacles in the way of preparations for the upgrade. Paks is not dependent in any way when it comes to fuel supplies either, he said, adding that the fuel could be purchased “from any source”.

Lázár said the reason why the project needed a minister without portfolio to oversee it was because it is a priority investment that would greatly impact Hungary’s economy and the entire region. He noted that János Süli is expected to be sworn in as minister in charge of the project on May 2. Lázár added that Süli would practice ownership rights over the company managing the Paks project. In addition to keeping in contact with the European Commission concerning the project, the minister will also be the one dealing with matters regarding the plant’s capacities, Lazar added.

Concerning the government’s energy strategy, Lázár said the goal was to secure 50 percent of Hungary’s electricity from Paks and the other half from green sources, primarily solar.

On the subject of planned changes in connection with domestic trade policy, the minister said the economic cabinet had come to the realisation that new negotiations must be opened up between employers, employees and representatives of consumer protection bodies. “It’s difficult to get on with the regulation of multinationals because they’ve got a lot of friends at every level,” he said.

The government office chief also talked about the need to reduce tax bureaucracy. He said the cabinet had discussed a strategy for carrying out a complete overhaul of the national tax office (NAV) after 2018 in the interest of boosting the country’s competitiveness. He said the authority would continue to be headed by a state secretary, adding that NAV would not be able to prepare companies’ tax returns before 2018.

He also said the government was proposing to re-regulate the profession of legal advisor and to add clarifications to the laws regulating the lawyer’s profession.

Source: MTI

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