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Crisis taxes to be swapped for permanent ones, Orbán says

History

In an interview to commercial station InfoRádió on Tuesday, Prime Minister Viktor Orbán said that due to the European Union's rejection of Hungary's crisis taxes over the longer term, the government was replacing them with new taxes, to be permanent elements of the country's economic policy.

Orbán said the government initially had been hopeful that the eurozone crisis management would be successful and that the crisis taxes could be removed after three years. It had also planned for the scenario that its emergence from the crisis would be slower, in which case the crisis taxes would have been extended, he said. But "due to the standpoint of the European bureaucrats", revenues from crisis measures had not been accepted as proper budget revenues, he said.

This, Orbán added, had put Hungary in a difficult situation requiring a solution. For this reason, he said he proposed removing the crisis taxes but ensuring that the big banks and companies still paid their share of the public burden permanently to "guarantee the country's operation".

Orbán likened the state's takeover of Takarékbank as the first manoeuvre in a "comprehensive military operation". The withdrawal of the bank's German parent now gave the state an opportunity to fulfill its long-standing goal of boosting the savings sector, he said, adding that with agreements, cooperation and "several new regulations", an "exceptionally strong and stable" financial service would be created, making it easier for households to get hold of credit.

He said opportunities were lying in wait for the state to seize in the area of public utilities, noting the example of the municipality of Budapest's recent buyback of the local water company.

"There will, I think, be similar actions in the future, and it is worth the state supporting these; indeed it is worth taking part actively," Orbán said.

The prime minister told the radio station that the government's goal was to raise the household savings rate and ensure that the domestic purchase of government bonds reached the 10 percentlevel. Measures will be put in place to make it as easy as possible for private individuals to access the bonds via the internet, he added.

On the topic of job-creation, Orbán said there was not an EU member state which had a lower minimum wage than Hungary. A balance must be found whereby businesses get support but at the same time the minimum wage gets hiked, he said. For this reason, the government will include a question in its latest national consultation -- a questionnaire sent to every household -- on whether "to raise the minimum wage or not, taking into account the loss of companies' competitiveness."

Also, two proposals will be put forward for debate, Orbán said: setting up tax-free business zones in high-unemployment areas; and a some kind of simple, flat tax for smaller firms.

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