A new budget, new tax system and new employment policy will be established in Hungary next July if current opposition party Fidesz forms the country’s next government, Fidesz economic policy maker Gyorgy Matolcsy told MTI on Thursday.
The new government should sign a new stand-by agreement with the IMF containing better conditions that will improve the stipulations of securing loans on international private markets as well by counterbalancing the effects of “bad news,” including the real budget deficit, Mr Matolcsy added.
Fidesz has got three scenarios for the tax system: one proposing a radical cut of personal income tax with a flat family rate; another which would decrease rates of all kinds of taxes; and a third which would cut social-security and health-insurance contributions only for employers and employees alike.
Fidesz will consult all sides of economy before making a decision, Mr Matolcsy said.
Growth of the local market and exports and cutting back on bureaucracy should provide resources for tax cuts, Mr Matolcsy said.
The new state budget will “confess the real amount of the deficit and will handle that,” Mr Matolcsy said but declined to comment on possible methods of “handling”. The Fidesz official conceded that the present budget was a “crisis budget,” but emphasised that it was not handling the crisis and would instead contribute to its deepening.
Among the downside risks concerning the budget adopted by parliament for next year, Mr Matolcsy listed a higher-than-expected fall in consumption, smaller credit outflows, unemployment, declining investments and slower-than-expected inflation, all resulting in smaller tax revenue.
The new government cannot accept that HUF 1,200-1,300bn will be missing from the budget next year and the overall deficit could be 7.5pc of GDP or more, he said. At the same time, Fidesz will not prepare new austerity measures apart from cutting back on bureaucracy, and “will work on economic growth”, Mr Matolcsy said.
On a world scale, he expected a return to sustainable growth from 2013 and added: even with Fidesz in government, Hungary will not become “Canaan”. As he put it: “even Fidesz can not turn recession into growth within one year”, but its programmes, including enhancing energy efficiency, development of environment industries and new public work programmes, might help.
They wont implement “austerity” measures? Who are they kidding? Magyarorszag accepted the billions of bailout money last year. Now they play by the IMF’s rule. Austerity wont be the word. Ireland slashed their budget by 20% last week. More debt is not thr answer. Liberalize the economy. Reduce taxes. Encourage entreprenuership. Encourage christian ethos. Encourage capitalism without apology. These are the basics. Discard marxism and its variants into the dustbin of history.
Sometimes I think that we are stuck with the worst government and opposittion ever in the democratic history of our nation. The only thing more scary than an incompetent government is having an opposittion with no alternative. They are simply spitting empty promises and populist statements, being more interested in opinion polls, than articulating a comprehensive economic policy as alternative.
I would love to have a journalist who is just as unpleasant to every politician. Don’t get me wrong. I really dislike the MSZP. But I distrust Fidesz, as I have no clue what they will do. Why doesn’t anyone ask them how they will achieve everything they promise?
Sometimes I have the feeling that, once in office, Fidesz will be more interested in settling old scores than leading the nation out of its misery.
Someone give me a real ALTERNATIVE!! No more empty words and promises. So tired, so tired..
The aspect not dealt with by Fidesz is that so many from the nation have no savings left to speak of; during the socialist era, there wasn’t the incentive nor real means to save for retirement. And since then, successive administrations have prevented the majority from saving (as well as discouraging risk that would have created new industries and furthered the tax base).
So even now promising to do away with the insanity, the fact is, both the gov’t and private cupboards are nearly bare; and that means there’s even less capital to start up new businesses, take risks, etc. which would increase the tax base.
Further, the next gov’t will have to face up to the fact that they’re not goign to be able to help out the truly needy nor those that previous administrations happily squeezed with the promise that their future pensions would be rosy.
Let me propose an analogy:
Hungary’s economy is the cardiac arrest patient laid out flat in the A&E ward, no pulse and with little hope without intervention.
Hungary’s politically empowered are standing there with tickling feathers and blowing up and popping brown paper bags. Some shout loudly just to hope they wake the patient up, some just argue amoungst themselves on what are the best feathers and paper bags to use. But they all agree to lock the door because the room’s just too crowded.
Meanwhile, the patient slips into almost irreversible brain damage.
So where are the Doctors with the 40000 Volt pads to get stuck in with a real solution and shock this stagnant situation back to life?
Keep looking, because when you find them we can all breathe a sigh of relief, although there is still the small issue of locked doors.