Budapest, December 15 (MTI) – Hungary’s parliament today passed a bill which will serve as the basis for next year’s budget.
The new legislation amends the public finance act, eliminates the pension reform and state debt reduction fund, and changes rules governing the excise guarantees of alcoholic products.
Under the new law, private pension funds will be eliminated if the number of paying members has been lower than 70 percent of the total membership for two months during the previous six months.
The 2015 budget act targets a 877.4 billion forints (EUR 2.84bn) cashflow deficit for the central government, with total revenue of 16,312.9 billion forints and expenditures of 17,190.3 billion forints.
The act targets a 2.4pc-of-GDP budget deficit, calculated with European Union methodology, for 2015, lower than the 2.9 percent target for this year.
It also targets a 0.9 percentage point reduction in public debt as a percentage of GDP to 75.4 percent, excluding exchange rate changes.
The budget contains an appropriation of 100 billion forints for general reserves (under the name of extraordinary measures), down from 113 billion forints this year.
The act earmarks 30 billion forints in the so-called Country Protection Fund, which is a risk insurance against unforeseen events causing a deficit overshoot. This buffer is down from this year’s figure of 100 billion forints, and was halved from the original bill.
There are a combined 196 billion forints in so-called targeted reserves, up sharply from 76 billion forints this year. These monies are set aside to compensate public sector employees for earlier unfavourable tax changes, for the reduction of the debt of central budget organisations and for various unspecified payouts.
The targeted central government’s cashflow deficit is down 274 billion forints from a recently upward revised deficit target of 1,151.5 billion forints for 2014.
Total revenues in 2015 are planned to exceed this year’s target by 329 billion forints or 2.0 percent. Total expenditure is seen to increase by a mere 55 billion forints or just 0.03 percent.
The recent amendment of the 2014 budget act left central government revenue unchanged while raised 2014 spending and the deficit by 167 billion forints, to a large part to make room for this year’s assets purchases by the government.