PM Orban: "We have submitted a budget for protection of household utility cost cuts scheme and for national defence"
The government has submitted to Parliament a budget serving the protection of the household utility cost cuts scheme and the national defence, Hungary's Prime Minister Viktor Orban announced on social media.
The budget for 2023 is one geared toward the protection of the household utility cost cuts scheme and toward strengthening national defence. As pledged, Hungary’s government will protect jobs, pensions, families and the cap on residential energy bills even in the protracted war situation. The resources to finance these costs are ensured by the 2023 budget, reads the draft submitted to Parliament by Finance Minister Mihaly Varga. Prime Minister Viktor Orban also shared an entry on his social media account, writing that “We have submitted the budget for the protection of the household utility cost cuts scheme and for national defence.”
The government has prepared a bill that will protect the government’s achievements, ensure the security of Hungarian families and keep the economy on a path of growth, Mihaly Varga said about the proposal. The draft budget had been calculated with an economic growth target of 4.1 per cent of GDP, a budget deficit target of 3.5 per cent, and a public debt level of 73.8% of GDP by the end of next year, with inflation expected to average 5.2 per cent.
“The government has taken into consideration the impact of the war and sanctions while drafting the budget, as well as high inflation, a slowdown in the European economy, and global economic uncertainties,”
the finance minister said, adding that “the environment of the budgeting process has never been as unpredictable as at the current time”. Nevertheless, almost all areas will receive more funds in 2023 compared to this year: an extra 730 billion forints (1.874 billion euros) will be spent on pensions, while education and health care will receive additional funds of 200 billion and 100 billion forints, respectively. The government’s public utility price cap only applies to households, because “it’s a family-friendly government”, the finance minister said in response to a question. Mihaly Varga also noted that the government expected local councils to manage their finances soundly and contribute to a balanced distribution of burdens.
The so-called 13th month’s pension will remain, support for families will continue, and pensions will increase to the extent of inflation, according to the draft budget for next year.
“Due to the Russia-Ukraine war and Brussels’s energy and sanctions policies, the most important task now is to preserve Hungary’s peace and security, as well as to ensure the country’s energy supply and to protect the household utility cost cuts scheme. The government has drawn up the 2023 budget along these two priorities. It contains the financial sources necessary for the National Defence and the Utility Bill Protection Funds, and also those required for the development of the Hungarian economy and the protection of the family support schemes and pensions,”
the document reads, pointing out that currently, Hungarian households pay the most favourable utility prices in the European Union. The Utility Bill Protection Fund is aimed at mitigating the effects of the drastic and unpredictable hikes in energy prices, protecting the achievements of the utility bill cuts, and with that, ensuring the financial security and energy supply of families. The government earmarked some 670 billion forints (1.7 billion euros) for this purpose. The National Defence Fund reduces the security risks of the war conflict in the region, creates sources for the further development of the military, and reinforces the physical security of Hungary. The fund has a budget of 842 billion forints (2.1 billion euros) in 2023, with the total military expenditure reaching 2 per cent of Hungary’s GDP. The budgets of the two funds are ensured mainly from the contributions of the sectors and large companies which gained significant excess profits due to the market processes resulting from the war and the pandemic.
“Besides all these, the budget also focuses on providing support to families and their having and raising children. The total sum of the family policy expenditure and tax cuts will increase by almost 450 billion forints (1.1 billion euros) compared to this year, reaching 3225 billion forints, (8.2 billion euros),”
the bill contains. The submitted budget also sets out that the moral and financial recognition of civil servants is one of the most important goals of the government, which will be reinforced with wage increases on an annual basis, making the fullest use of budgetary resources.
The 2023 budget also contains sums earmarked for the third phase of the pay rise of doctors working in primary and specialist care, which began in 2021, as well as increasing the wages of other healthcare professionals. It also covers the salary increase scheme launched in 2022 of doctors performing public health and epidemiological tasks.
The Budget Council has stated about the bill that the 3.5 per cent budget deficit target for next year can be achieved, if the country can follow the planned macroeconomic trajectory, and the tax changes and expenditure cuts are worked out in detail.