PM Orbán says employees with children are almost as well-off financially as childfree workers

Orbán Ukraine
Photo: FB/Orbán

Employees with children are almost at the point that they are no worse off financially than their child-free peers, Prime Minister Viktor Orbán said in an interview to public radio on Friday.

Orbán also said there was keen interest in the state’s 3 percent mortgage deal for young homeowners, which would lead to a rapid expansion in home-building.

Orbán said the government maintained a pro-family policy aimed at producing a higher birth rate, and there should not be a financial penalty for people starting a family.

Indeed, they would be better off financially in the future, he added. “We’re not there yet, but we’re getting to the point that someone won’t be worse off financially initially if they have a child…”

In western Europe, he said, migration was used to fill demographic gaps. “[If] they don’t have their own children, then [they] replace them with migrants,” he declared, adding that Hungary preferred to sweep aside money hurdles that hindered young people from starting a family.

“The West wants Hungary to be an immigration country,” he said. “But Hungary won’t compromise on immigration.” Taking average earnings, families with the CSED benefit now have a tax exemption which adds HUF 78,000 (EUR 196) each month to their income, while those with GYED support enjoy additional income of HUF 43,000 (EUR 109), he noted.

The prime minister also listed various tax deductions for children, with families of three children saving between HUF 99,000 to 148,000 (EUR 99 to 379). Further tax relief of this kind is in the pipeline, he noted.

Moreover, the 25 year mortgage deal with a fixed 3 percent interest rate free of exchange rate risks was a boon for first-time buyers, he said, adding that people were showing keen interest in the scheme in which borrowers of HUF 20 million (EUR 50,515) can save HUF 60,000 (EUR 152) each month compared with a market loan.

Fully HUF 150,000 (EUR 382) can be saved in monthly payments of they take out a loan of HUF 50 million (EUR 126,300), he added. Price caps have been set, Orbán noted, and this would prevent house price inflation.

Further, the loan cannot be used to buy luxury homes, with caps of HUF 100 million and 150 million (EUR 252,570 and 378,850) on flats and houses, respectively, and a ceiling of HUF 1.5 million (EUR 3,789) per square metre.

One debate, he said, centred on whether the government should subsidise the building of rental flats or help people buy their own flat, adding that in his view whereas rental apartments were needed, this entailed dependence. The point of the “Hungarian dream”, he declared, was for people to own their home, and this endowed them with “ultimate independence”.

Mortgage repayments under the government’s loan scheme would be lower than paying rent, he said, noting that borrowers ultimately ended up owning their home. This policy, he insisted, would help to strengthen Hungary’s middle class “and the nation”.

Also, the loan scheme would lead to a boon in housing construction, he said. Construction capacity for expansion was available, Orbán said, explaining that thanks to an agreement with Roma communities whereby the government supported their work activities rather than allowed them welfare, many had opted to work in the construction industry.

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