Parliament votes to phase out subsidies on home savings bank deposits
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Parliament on Tuesday voted to phase out the state subsidy on deposits with home savings banks.
The motion was passed in an expedited procedure with a vote of 125 in favour, 49 against and no abstentions.
The bill was submitted a day earlier by Erik Bánki, an MP of ruling Fidesz who heads parliament’s economy committee.
Presenting the bill on Monday, Bánki said the subsidy on the home savings bank deposits, 30 percent up to 72,000 (EUR 222) forints a year, had not effectively served its purpose of supporting home construction recently, while home savings banks had pocketed “extra profit”.
The proposal does not affect existing contracts: subsidies on these will be paid until the deposits mature, he added.
Bánki said in the justification of the bill that the subsidised home savings bank deposits had become “inefficient” and “dear to the state and the taxpayer”. Deposits in home savings banks account for just one-third of all state-subsidised savings, but they eat up three-quarters of total state subsidies on savings, he noted.
“Because of the typically small amount [saved] in the construction, few homes are built from the savings. In a number of cases, the savings don’t even go to home purchases, because they can also be used for the construction of a swimming pool or a sauna when the contract matures,” Banki said.
Without the subsidies, expected to exceed 70 billion forints this year, the yield on deposits in home savings banks would be negative, he said.
At the same time, home savings banks are padding their pockets, booking almost 60 billion in extra profits since 2010, he added.
Bánki noted that more than 90,000 Hungarian families have made use of 250 billion forints in grants in the framework of the Home Purchase Subsidy Scheme for Families with children, known by its Hungarian acronym “CSOK”, since the groundwork was laid for the programme late in 2015.
Jobbik’s Dániel Z Kárpát told a press conference that the conservative party would stage “tough, outspoken” demonstrations against the decision and turn to the president to address their concerns on the measure’s constitutionality.
By phasing out home savings subsidies, Fidesz “continues to devour Hungarian future”, Kárpát, the party’s deputy leader, said.