Industrialists say austerity package will help only temporarily


The government's New Balance package of austerity measures will correct Hungary's budget balance only temporarily; it is expected to worsen the country's competitiveness and therefore the government will not be able to withdraw the austerity measures after just one and a half to two years, according to an assessment by the Hungarian Association of Industrialists (MGyOSz) published on Monday.

The MGyOSz accepts the need to raise additional budget revenues in the given fiscal situation. It argues, however, that the government has taken steps to raise budget revenue, without reducing budget expenditures through structural changes. This means that budget expenditures will continue to increase more than revenues as a percentage of GDP after just a temporary pause. The government fails in its deficit reduction program to address the continuing losses of some big state-owned companies, to improve the transparency of public expenditures, to crack down on corruption and to rethink the tasks of government, the association said. The measures will cut growth, and if the economy slips into a downward spiral, there may not be enough money to enliven growth in one-and-half or two years time, needed for the required reforms or to cover the state's co-financing requirement for EU funding. MGYOSZ says elements in the government's program, such as increased payroll taxes, will hurt businesses' competitiveness, reduce employment and increase activity in the grey and black economies. The program will make the tax system more complicated and increase administration fees. Tax changes introduced mid-year will create instability and alarm Hungarian as well as foreign investors.


MOL Launches Arbitration Against Croatian Gov't Energy Trade

MOL Launches Arbitration Against Croatian Gov't

Improving Competitiveness 'Top Priority' of EU Presidency - ... EU

Improving Competitiveness 'Top Priority' of EU Presidency - ...

Nearly 40% of Teachers Use AI Innovation

Nearly 40% of Teachers Use AI

Int'l Travelers to Europe Prioritize Safety, Quality This Su... Tourism

Int'l Travelers to Europe Prioritize Safety, Quality This Su...


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.