Hungary’s opposition Fidesz party on Sunday criticized the prime minister’s plans to change the tax, welfare and pension system.
Prime Minister Ferenc Gyurcsany has won the support of his party and the government for the plans, which are likely to include a rise in the value added tax (VAT).
“The programme the government has prepared is a new austerity package instead of providing growth stimulus and easing the effects of the global economic crisis,” the party’s deputy spokesman, Andras Cser-Palkovics told reporters.
He said in the current situation, the VAT should be lowered not increased, the value of pensions should be maintained in real terms and the family support system retained in its current state.
In response to Fidesz’s criticism, the government spokesman’s office said the main opposition party had so far not been able to put forward alternatives for an anti-crisis rescue plan and was only concealing the fact that it had no programme.
I think the PM and his cronies are utter idiots, he is going against the approach of every other EU country who are attempting to help the man in the street get through the economic nightmare, i.e. reducing personal tax, reducing VAT, reducing corporate taxes to attract more investors etc. He is only adding burden to an already overburdened taxpayer and chasing away prospective new investors who could bring added revenue and more jobs.
Right, but if you do all that, and then don’t cut anything (Fidesz’s basic plan) you’ll have a fiscal gap back up near 10% of GDP, which simply cannot be financed.
Erik,
Gyurcsany wants to squeeze more blood out of a dying economy. Orban would like to revive it first. If people are left with more money, they are happier, spend more, create new jobs and eventually pay more taxes even at a lower level.
We have to cut government waste, restructure our debt and restart the economy. Anything else would be uncivilized.
Peter Bee, you will need to get a new source for your opinions, other than Fidesz press releases.
If, as you say, the right approach involves “reducing personal tax, reducing VAT, reducing corporate taxes to attract more investors” then you will be pleased with Gyurcsány’s plan. As reported elsewhere on this site, he plans to do two of those three things.
Stan, you should be happy, too, as the gist of the proposals is to lower taxes and cut government waste, as you advocate. You can read all about it, right here on realdeal.hu – “Gyurcsány outlines tax changes, new projections for economy”.
Interestingly enough, nobody posted any comments on that story. Another instance of Fidesz noisemaking drowning out reality.
Kincs,
I have read all that’s available about the Gyurcsany proposal. It looks very much like a substitute for real ideas. It’s time to show that the government is doing something, but in this case something is worse than nothing.
The tax cuts are not deep enough to make a significant impact. Too little, too late.
This government had 6 years to recognize the problem and work out a comprehensive tax reform, and they did nothing. Tens of thousands of Hungarian businesses were chased into tax exile, with the blessing of Gyurcsany. It never crossed his mind to turn the tide and attract tax refugees instead of producing them.
If you can stomach it, listen to Gyurcsany’s speeches, and you’ll see that he’s a fake.
Stan, you may be right in saying this is too little, too late, but you can’t really argue that lowering the payroll tax and income taxes are “worse than nothing”.
If it’s “a substitute for real ideas,” then what “real ideas” do you have in mind?.
@Kincs. I did write a comment on the tax changes but it’s not there now. I modelled the impact of the changes, and they are negligible.
Depending upon whether the tax rises to 19% or the progressive point moves to 2.2M, the reduction on the marginal tax/contribution reduces between 1.1 and 4%.
Considering most companies have to work a combination of black and white salaries, the effect on the population is minor. The individual salaries don’t change, people receive “net” incomes.
Regardless, the overall contribution is way too high – it needs to drop not 4% but something like 40. I’m trying to make it work here completely legally and it’s debilitating especially in the current market situation.
Totally agree with Rolrox. The tax burden is so high a 4 percentage point cut will not not make any difference at all. And Hungary is now way beyond the point when doing “something” is enough. He still hasn’t got the guts to act, just doing his usual two-faced weather-cock routine.
The Prime Minister is a dickhead, and most of his government’s actions are just king-sized shits on the idea of responsible government.
This is not nearly enough, but at least it is a step in the right direction. Let’s support it. What’s Fidesz opinion on this? I’m not sure but I guess they oppose it because Feri proposed it.
The arguments can last for a year and day about the draconian measures Gyurcsany Ferenc and his comrades are currently pursuing in an effort to revive the economy and the country.
The reality is that the badly needed reforms in all areas of Hungarian life will be ‘shelved’ until a new government is elected.
The new administration (Frank will be in the Bahamas at this time) will have its hands full trying to find a way out of the current debacle that Gyurcsany has created.
In twenty years the wicked witch’s spell has not been broken.
Hungary is bankrupt in every sense of the word.
Let’s get real, already. Hungary needs to win the Lotto..the IMF Lotto!