Prime Minister Orbán opens the spring season in Parliament: announcements, tax cuts, Brussels 🔄

Budapest, February 24 (MTI) – Prime Minister Viktor Orbán said the government wouldn’t allow people to be “fleeced” and pledged to intervene if the normal course of commerce failed, addressing lawmakers at the start of the spring session in parliament on Monday.

Price regulation and caps

Orbán said he had instructed the national economy minister to start talks with supermarket chains where the prices of flour, milk, eggs and cooking oil had climbed. He added that price increases of that scale were unacceptable and warned retailers that price regulation and caps on profit margins could be introduced, if necessary. As we wrote today, Minister Nagy explained Orbán’s announcements – details on VAT refunds and tax exemptions

Interlude in the Parliament

At the start of the speech, independent lawmaker Ákos Hadházy disrupted the session by playing a recording of the prime minister’s earlier speech from the balcony. Orbán said the recording only showed “the old truth that only Fidesz can surpass Fidesz” and proceeded with the speech.

Economic affairs, announcements

Addressing wage increases, Orbán said the government had agreed on pay rises with unions and employers that businesses could manage without making layoffs. He added that the monthly minimum wage for unskilled labourers will rise by 9 percent to 290,000 forints (EUR 720), while the minimum wage for skilled workers will reach 349,000 forints in 2025.

The minimum wage will rise by a further 13 percent in 2026 and by 14 percent in 2027, he said. Substantial wage hikes are planned for workers in education, science, health care and the armed forces, he said.

Orbán said the agreement had brought within reach a 1,000 euro minimum wage and a 1 million forint average wage. The government was planning for average pay to reach 750,000 forints this year “and to start marching towards 800,000 forints,” he said.

He said teachers’ wages will increase by 32 percent this year and by 21 percent in 2026, with their average wage reaching 844,000 forints, more than six times the sum in 2010.

He said the government is investing more than 500 billion forints in the education sector than it did in 2024.

Meanwhile, doctors’ average wage is 2.1 million forints. He added that the government is allocating 300 billion forints more to the health-care sector than it did in 2024.

The government has also decided to raise the wages of upper management employees, he said. Salaries of judiciary employees are also being raised, bringing the wages of judges to 2.25 million over three years and raising the wages of other employees in the sector, too.

The wages of researchers are set to increase by 30 percent; salaries in the sector are at 800,000 forints and will be over 1 million by 2027, he said.

He said law enforcement members will receive a bonus for carrying firearms this month for the first six months of the year.

He said the government is scheduled to pay 1,100 billion forints in interest on bonds to some 800,000 account holders in the first three months of 2025. Hungarians currently hold government bonds worth 14,000 billion forints.

Further, Hungary’s government is introducing the biggest tax reduction programme in Europe, Orbán said.

Orbán noted measures the government announced earlier, including zero-interest credit for young employees, subsidies for home renovation in the country’s smallest settlements, a student dormitory construction scheme and policies to support SMEs. He also affirmed the government would introduce lifetime personal income tax exemptions for mothers with three children. He added that the exemption would be rolled out gradually and apply to mothers under 40 from January 1, 2026, to those between 40 and 50 in 2027, those between 50 and 60 in 2028, and those over 60 in 2029.

He said the number of applications for loans for young employees has reached 10,000 and is growing. Young people deciding to work are paying no personal income tax and can avail themselves of a 4 million forint interest-free start-of-life loan.

Meawhile, the government has launched a rural home renovation subsidy programme for localities with fewer than 5,000 inhabitants, available for families and pensioners from January 1, he said.

He said the government had earlier extended the 5 percent VAT discount for new home purchases and launched a housing programme that was expected to raise the number of newly built homes by 10,000 annually.

Further, the government extended the use of private pension accounts for home purchases and renovations, and 50 percent of the SZÉP card contributions can also be used to that end this year, he said.

New student dormitories in Budapest

The government plans to build new student dormitories in Budapest with at least 12,000 places, rising to 18,000 eventually. “Encouraging” negotiations with universities were ongoing, Orbán said.

SME, Széchenyi card

Businesses tapping the Széchenyi Card scheme will enjoy a preferential interest rate of 3 percent, down from 5 percent, while small and medium-sized enterprises will have access to a capital fund of 100 billion forints.

SMEs will also have government help to plan investments and 50 percent financing for buying equipment, as well as 350 billion forints of support aimed at stimulating exports, he added.

The threshold of the VAT exemption has been raised from 12 million to 18 million forints, boosting the income of 900,000 businesses, Orbán said.

Orbán: Tax cuts for families

Tax relief for children is being doubled, first increasing by 50 percent from July 1 and by another 50 percent from January next year. Accordingly, taxes and contributions for a single child will contract by 20,000 forints, while parents of two children will pay 80,000 forints less. Families with three children will be forgiven 200,000 forints.

Further, income tax on CSED (baby care) and GYED (child care) payments will be scrapped, while the age limit for accessing baby bonds will be raised to 35 years, with frozen interest extended until the end of June, providing a safety net for 300,000 families.

“These measures are unprecedented in Europe,” he said, adding they amounted to “the largest tax reduction programme in Europe”.

While a “huge expense for the budget”, the measures were affordable while reducing the budget deficit and public debt, Orbán insisted. “Hungary can do this,” he declared.

Pensions

The government is also drafting a plan for monthly VAT refunds for pensioners, covering basic foodstuffs such as vegetables, fruits and dairy produce in cases where the VAT exceeds five percent, he said.

Brussels: child protection, man and women, migration

Meanwhile, the prime minister insisted that parliament should not withdraw Hungary’s child protection law “in the face of Brussels’ demands” but “take further steps in child protection”. “Child protection surpasses all else; the constitution and laws must guarantee this,” he added.

Moreover, the government wants the Fundamental Law to stipulate that exclusively men and women live in Hungary and that the “healthy development of children” and their upbringing by their parents is enforced.

Orbán said Hungary would not implement “the Brussels migration pact”, adding that the European Commission was abusing its power by punishing Hungary for “our laws rejecting migration”. But the fine, he added, was less costly than letting migrants in, he added.

He called its rejection of migration Hungary’s open revolt, “and other countries are following us”. Europeans, he added, were “fed up with Brussels bureaucrats” forcing immigrants on them and were “eager to rebel”. “Let’s help them!”

Orban also called for the withdrawal of a suit against Hungary initiated by the European People’s Party, Socialist and Liberal groups of the European Parliament.

“The Hungarian opposition parties in Brussels, with the exception of Our Homeland, are also suing Hungary.”

The prime minister said the EPP, of which Hungary’s opposition Tisza Party is a member, and the European Socialists, which includes the Democratic Coalition, have launched the suit against Hungary with the aim of “taking away funds owed to the country.”

• As we wrote today, Orbán congratulated on the German elections, but not Friedrich Merz – details HERE

According to Orbán, the European Union has paid out EU funds worth 3,200 billion forints in the current financial cycle. “The funds owed to us, and what we have fought for, are flowing in; this is what Tisza, the Socialists, Democratic Coalition and Momentum want to snatch,” he said, calling on them to drop their action.

The peace treaty

Meanwhile, the prime minister said Ukraine “will not be a NATO member.” The fate of Ukraine and its remaining territory was important for Hungary’s security, he said. “This issue will be settled in ceasefire and peace negotiations.”

The peace treaty, Orbán added, must guarantee the security of Hungary and NATO member states. Ukraine’s status must be managed accordingly, he added. “It looks like the Europeans won’t be the only ones to decide, or at least not the main decision-makers here,” he said.

Ukraine’s EU membership, however, was “exclusively a European issue”, Orbán said, adding that Ukraine could not join the bloc “without the decision of the Hungarians”.

“Today, the conditions aren’t right for membership; today, this would destroy Hungarian farmers and even the entire national economy,” the prime minister said.

UPDATE

Lawmakers elect governing parties’ candidate for Monetary Council

Budapest, February 24, 2025 (MTI-ECONEWS) – Lawmakers supported the governing parties’ candidate for member of the rate-setting Monetary Council of the National Bank of Hungary (NBH), Andrea Máger, in a vote on Monday.

MPs voted 123 for and 50 against to elect Máger.

Máger, who was earlier the minister in charge of managing state assets and the head of state lottery company Szerencsejáték, will replace Gyula Pleschinger, an external member of the Council whose six-year mandate expires March 4.

Ahead of the vote, Máger told parliament’s Economy Committee that the central bank’s independence was its biggest asset, but added that a coordination of monetary and fiscal policy had formed the foundation for successful economic policy in recent decades. She said the NBH’s most important task was to achieve price stability and sustainability. She added that the central bank needed to focus on reducing inflation expectations which impacted household savings and businesses’ propensity to invest.