The adoption of the 2020 budget shows that the vast majority of Members of Parliament agree with the continuation of an economic policy that is based on the strengthening of families, the protection of the economic results achieved, the maintenance of the country’s security and pay rises.

At a press conference held after the closing vote on Friday together with Máté Kocsis, head of Fidesz’s parliamentary group, Finance Minister Mihály Varga highlighted that next year’s budget provides excess funding in effectively every area. Families deciding to have and raising children are at the centre of the budget, and all the necessary funds are available for the implementation of the family protection action plan. Next year, funding provided with a view to supporting families will increase to almost HUF 2,228 billion which is some two and a half times the allocation that was made available in 2010.

The adopted proposed amendments further increased the fiscal allocations intended to promote education, culture, leisure-time activities and tourism; at the same time, they do not jeopardise either the all-time low 1 per cent deficit target to GDP set for next year, or the continued reduction of the sovereign debt, the Finance Minister said.

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He observed that the proposed amendments submitted by the opposition would have resulted in significant tax increases and the reduction of funds intended for family support and planned developments, beyond the fact that they totally disregarded the funds available in the budget. As a result, they could not support any one of these proposed amendments. In the adopted budget for next year, the grand total of expenditures of the central budgetary sub-system, not including local governments, amounts to HUF 21,793,000 billion, while the grand total of revenues amounts to HUF 21,426,000; in consequence, the deficit amounts to HUF 367 billion.

The Finance Minister highlighted that next year’s budget includes all the resources that are necessary for the implementation of every element of the family protection programme, including the baby expecting support, the extension of the preferential ‘csok’ loan facility, the cancellation of the mortgage debts of families with children, the car purchase programme of large families, the ongoing creche development and construction programme, the personal income tax exemption of mothers with four or more children, and the introduction of the child care allowance for grandparents.

As part of the programme, next year the budget will provide funding worth more than HUF 197 billion for Hungarian families. Within the framework of the baby expecting programme, Hungarian families will have access to any-purpose interest-free loans to the value of some HUF 420 billion. He added that next year the tax benefit of families will increase; this, combined with the benefit of those getting married for the first time, will reach HUF 358 billion as expected. Since 2011, as a result of family tax benefits, some HUF 2,600 billion has remained with Hungarian families in total. Next year, the amount of housing grants will amount to almost HUF 300 billion, meaning that compared with 2010 the cabinet will have doubled the funds available for housing support.

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The Finance Minister highlighted that the grants available for children’s meals will further increase; in 2020 more than HUF 82 billion will be available for this purpose. From the 2020-2021 school year, text books will be free for all children; the funding allocated for this purpose will increase to some HUF 14 billion, he added.

In 2020 the budgetary funds available for pensions will increase by HUF 136 billion. The budget calculates with a 2.8 per cent inflation rate, and therefore pensions and pension-like services will increase by this rate from the first of January 2020. Additionally, the government has set aside more than HUF 20 billion for the payment of pension premiums; pensioners can expect pension premiums adjusted to the performance of the economy.

The Finance Minister also said that as signs of stagnation are emerging in the Eurozone as well as in the world economy, the cabinet has identified an economy protection action plan. The government continues to insist that the expansion of the Hungarian economy should exceed the EU’s average growth rate by 2 percentage points also in the future. In harmony with this, the social contribution tax has decreased by 2 percentage points from 1 July this year, from 19.5 per cent to 17.5 per cent, he added.

As part of the economy protection action plan, the tax of small businesses (kiva) will decrease, there will be fewer taxes, and they will also do away with the replenishment of tax advances. By the end of 2022, the VAT on hotel and accommodation services will decrease to 5 per cent, while in the interest of promoting and facilitating work force mobility, the cabinet will extend the programme for the construction of workers’ hostels.

Mr Varga said that additionally there will be more funding in all priority areas; the allocation of education will increase by HUF 645 billion, health care will have HUF 770 billion excess funding, while the allocation of law enforcement and the maintenance of the country’s security will be HUF 800 billion higher than in the budget last submitted by the Left in the 2010.

In answer to a question, the Finance Minister said the issuance of the Hungarian Government Securities Plus is a success story; according to the latest data, so far members of the public have purchased securities worth HUF 1,162 billion.

(Cabinet Office of the Prime Minister/MTI)