Hungarian Prime Minister Péter Magyar presented a wide-ranging package of government reforms on Thursday, including salary caps at state-owned companies, possible VAT reductions, retrospective wealth investigations and a review of public-spending oversight. The Péter Magyar press conference also addressed Hungary’s budget deficit, fuel prices, the election of an interim president and investigations into projects inherited from the previous government.
According to MTI, the announcements were made at a government press briefing in Budapest on 23 July. Several measures have already been approved, while others remain under preparation or will require new legislation.
State company boards and executive salaries to be cut
The government will reduce the number of supervisory and management board members at state-owned companies to the minimum required by law. Remuneration for board members will also be lowered.
A gross monthly salary ceiling of HUF 3.6 million, approximately EUR 9,900, will apply to executives at state-owned companies. Ministers and state secretaries serving on company boards will no longer receive additional compensation, while deputy state secretaries will be entitled to no more than half of the standard board fee.
PM Magyar said the changes could save the state tens of billions of forints annually. He also claimed that earlier cuts to MPs’ expense budgets had already produced savings of around HUF 50 billion, or EUR 137 million.
Why it matters
State company positions have frequently been criticised in Hungary as highly paid appointments with limited transparency. The real impact of the reform will depend on how many positions are abolished and whether the government publishes company-level information on salaries, board memberships and savings.
PM Magyar press conference outlines integrity reforms
The government wants to authorise the National Tax and Customs Administration, known as NAV, to investigate the wealth of senior politicians and people living in their households going back 20 years.
The proposed system would cover approximately 1,000 people. Investigations would be selected through risk analysis, according to Magyar, while newly elected MPs and recently appointed ministers could become subject to checks after two years in office.
The government has also ordered a review of the State Audit Office. Its supervisory powers, responsibilities and leadership structure could be changed, although the legislative process is only beginning.
Magyar also said conflict-of-interest rules applying to former ministers would be tightened. His comments followed questions about former foreign minister Péter Szijjártó taking a position at Chinese electric vehicle manufacturer BYD.
Why it matters
The proposals could substantially expand scrutiny of political wealth and public spending. Their credibility, however, will depend on legal safeguards ensuring that investigations are independent, proportionate and not used selectively against political opponents.
VAT cuts planned for medicines, firewood and food
The government plans to reduce VAT on prescription medicines from 5 per cent to zero. Magyar estimated that the measure would cost the budget HUF 7 billion, approximately EUR 19.2 million, over a full year.
A reduction in VAT on firewood from 27 per cent to 5 per cent is also being prepared and could be approved before winter. The government additionally intends to double the HUF 5 billion, or EUR 13.7 million, social firewood fund and extend the programme to settlements with between 5,000 and 20,000 residents.
A broader proposal to reduce VAT on healthy food to 5 per cent remains at an earlier stage. Depending on which products are included, the measure could cost the budget between HUF 150 billion and HUF 300 billion, approximately EUR 412–823 million.
Magyar acknowledged that VAT reductions do not automatically result in equivalent consumer price cuts. He said an accessible price-monitoring system would be needed to prevent retailers from retaining the benefit. Details here: Hungary prescription drug VAT scrapped as government widens tax overhaul
Interim president and constitutional changes
Parliament must elect a new president within the 30-day period prescribed by law, Magyar said. An interim head of state is expected to be chosen in August and remain in office until a new constitution is adopted. As we wrote earlier, Hungary’s next president: two women temporarily take the country’s top constitutional posts.
The government plans to launch a broader constitution-making process in September, involving citizens, civil organisations and professional groups. The resulting text would be submitted to a referendum and could change the method used to elect future presidents.
Under Hungary’s current constitutional system, the president is elected by parliament rather than directly by voters.
Asbestos fund and EU security programmes approved
The government has created a HUF 3 billion, or EUR 8.2 million, fund to tackle roads built with asbestos-contaminated material. Municipalities will be eligible for support if they possess an asbestos map, continuously monitor pollution levels and submit reports every three months.
Officials said 667 inspections had been conducted and above-limit readings had previously been recorded in six locations, although Magyar said no location currently exceeded the health threshold.
The cabinet also approved programmes worth HUF 122.8 billion, approximately EUR 337 million, using EU home-affairs funds. The money will support security-related information technology, measures against terrorism and irregular stays in the Schengen Area, as well as education and employment programmes for refugees, particularly those arriving from Ukraine.
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Gondosóra programme and state events face review
Magyar said the government had removed the Gondosóra elderly-support programme from an EU-funded package because it did not meet the relevant milestones and commitments. He alleged that the technology was outdated and the project overpriced.
Authorities are already examining the programme, while the government is preparing its own report and may file a separate criminal complaint. The programme’s objective – providing emergency assistance to elderly people – would not be abandoned, he said.
The prime minister also announced plans to rebuild the state’s internal capacity to organise major public events instead of relying heavily on private contractors. He said no advance payment had been made on an HUF 8 billion, or EUR 22 million, contract connected to the 20 August fireworks display.
Deficit reduction and possible fuel-price intervention
Magyar said the 2026 budget deficit could be reduced to 7.5 per cent of gross domestic product, partly because EU funds had become available. A decline below 6 per cent was expected in 2027, while reaching the EU’s 3 per cent threshold by 2030 remained possible if economic and fiscal conditions developed favourably.
On fuel prices, the prime minister said retail prices had so far remained close to the government’s protected reference level despite rising wholesale costs. He warned that further increases were possible but said the government was prepared to intervene if households, farmers and businesses faced a major price shock.
Fixing prices at substantially lower levels could cost the budget around HUF 50 billion, or EUR 137 million, per month, he added.
The measures outlined at the Péter Magyar press conference combine immediate spending cuts with longer-term reforms of political accountability, social policy and state capacity, although many of the proposals still require legislation and detailed implementation rules. Magyar also briefly confirmed that criminal complaints had been filed over four Eximbank transactions worth approximately HUF 1,000 billion, or EUR 2.74 billion, which are covered in a separate Daily News Hungary report.
If you missed it: Hungarian government seeks Eximbank investigations over EUR 2.74 billion in deals
