National Development Minister György Matolcsy highlighted a number of one-off and continues revenues sources that will in their entirety be devoted to reducing the indebtedness of the Hungarian state to 65% to 70% by 2014 from the current level which is over 80% of GDP.
The sources include 63% of the recently nationalized private pension fund assets. The government is also set to introduce a road use toll that would go to filling the gap, while the special tax on the finance sector has been extended to three years. All revenues will go to forcing down the debt. Likewise, the planned reduction of industry taxes will be postponed and the resultant extra earnings will go to reducing the margin.
The Széll Kálmán plan will help end squandering and in 2012 it will improve balance by HUF 550 billion. In 2013 and 2014 it will improve the situation by HUF 900 billion each, Matolcsy said. The strategy alone is expected to boost competitiveness and lead to the creation of 300,000 jobs.
Deputy Prime Minister Tibor Navracsics also announced steps that would reduce central spending. These include the limitation of benefits available in the pension system allowing for early retirement and retirement because of disability.
He highlighted that Hungary’s new constitution currently in the making would include provisions preventing national debt from passing a certain limit.
The government will shortly implement a strategy that would revise the current scheme of community labor, thereby providing jobs to those currently unemployed. As a result, the range of those eligible for state grants would be reduced.
Hungary can grow by 4% to 6% in the wake of these measures and will become one of the leading countries in Europe in the field of new investments and economic advance, Matolcsy said.
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