National Assembly debates 2017 “budget of predictability”

May 12, 2016


“This budget is the budget of private interests. It was written by the government but its authors’ hands were held and guided by the oligarchs.” – Erzsébet Schmuck, MP, Politics Can Be Different

Hungary’s National Assembly convened Wednesday to begin debating the country’s 2017 budget. The practice of submitting a budget proposal well before the following fiscal year has been something Fidesz has lauded as one of its crowning achievements, but subsequent modifications and budget appropriations made unilaterally by the Prime Minister’s Office cause critics to question the reliability of the budget figures.

Furthermore, a law passed in March gives the government the right to modify the budget without seeking parliament’s approval.

Calling it a “budget of predictability”, Fidesz claims the budget will move all Hungarians one step forward in life. The co-governing Christian Democratic People’s Party (KDNP) says this is a budget for the families.

The political opposition says the budget is one of austerity that defunds education and various social programs by some HUF 1 trillion (USD 3.7 billion).

Economic daily Világgazdaság and print daily Népszabadság have published pieces about the austerity budget.

According to Világgazdaság, the government’s 2017 budget proposal shows decreased funding to social programs, including the Start Program employment scheme and other benefits for families and those with disabilities.  The Ministry of National Economy responded to Világgazdaság’s piece by essentially calling it hogwash.

Of the 2,500 items listed in the 2017 budget proposal, almost 1,500 will see no increase in funding compared to the 2016 budget. The economic daily identifies 381 instances of decreased funding, concluding that the resulting savings will be used to fund other budgetary items. While true that HUF 300 billion of the diverted funding will be compensated for by EU funds (which will phase out), the next cycle of EU funding will increase to HUF 700 billion in 2017. All in all, more will be spent from the state’s coffers but the increase will not be felt everywhere.

Despite government promises to increase spending on education, the budget actually provides for a decrease, according to the economic daily.  State spending on the Start Program employment scheme, disability pensions and family subsidies would decrease.

As far as the government’s own calculations are concerned, the 2017 budget is premised on 3.1 percent growth of GDP, 0.9 percent inflation and 2.4 percent budget deficit.

Ruling party politicians are lauding the proposed budget citing reduced value added tax on milk, bread, poultry, telecommunications and restaurants as a sign of how Hungarians will be able to take one step forward.

Opposition parties are critical of the budget for further exacerbating Hungary’s socio-economic disparities.

Hungarian Socialist Party (MSZP) parliamentary fraction leader József Tóbiás accused the government of continuing its policy of enriching its family members and cronies.

According to Zsuzsanna Szelényi (Együtt), the HUF 1 trillion of state funds which ought to be spent improving the country’s education system and improving the well-being of Hungarians is being diverted to fund “frivolous projects.”

Dialogue for Hungary (PM) MP Tímea Szabó called the budget proposal a budget of tyrants and devoid of morality.

Politics Can Be Different (LMP) MP Erzsébet Schmuck said it is the worst possible budget. According to Schmuck, the budget will continue to widen inequality by making allocations to those who are favored by the government.

“This budget is the budget of private interests. It was written by the government but its authors’ hands were held and guided by the oligarchs,” she said.