9 days ago
The headline figures are: HUF 21,791 billion (EUR 67.7. billion) in central expenditures and HUF 21,424 billion (EUR 66.54 billion) in revenues, resulting in a central budget deficit of one percent of GDP, below even the government’s previous plan of a 1.5 percent deficit for 2020 laid out in the country’s European Union convergence plan.
Next year’s budget dedicates HUF 2,228 billion (EUR 6.9 billion) to various family subsidies, the highest amount relative to GDP in Europe. Having said that, let’s take a look at the previous budgets of the currently ruling government to make sense of the larger picture.
When it took over in 2010, the Orbán cabinet had to put out the fires: it took three years to reduce the budget deficit to a level acceptable to the European Union and it wasn’t until 2014 that results finally began to show and the government could concentrate on improving things.
The 2014 budget was that of reduced utility bills, slashing gas, heating and power prices by 25 percent in three consecutive steps. 2015 was the year of settling excessive private debts to banks: loan rates have been significantly reduced and HUF 1,000 billion in private debts (mostly foreign currency-based mortgages) have been written off.
2016 was the year Finance Minister Mihály Varga said was a turning point, the end of crisis management and the beginning of meaningful changes: a systematic reduction of taxes and related bureaucracy, with the goal to leave more money in the economy and in people’s pockets.
2017 was the year of substantial increases in housing subsidies, aimed at further improving the financial position and living conditions of families, as well as the first year of pension bonuses. The 2018 budget was geared towards stimulating economic growth. Looking back at these years it is quite clear that we have gotten somewhere and have a vested interest in safeguarding those achievements. This is the true measure of responsible budget planning.
As we have previously reported, after the general debate of the budget in Parliament and separate debates on the budget chapters in parliamentary committees, the vote on the budget is scheduled for July 12th. Breaking with the previous government’s practice of passing the following year’s budget at the end of the year, the Fidesz government has since 2011 consistently submitted it to Parliament by June at the latest.