Pig in a Poke Tempts Snouts to the Trough

(Confession – many years ago your correspondent joined British Rail as much for the free travel on the continent as the salary and career.)

Just now, the headline perk in Hungary is a pig, or more accurately, a couple of thousand half pigs.

This is after Lőrinc Mészáros, owner of Mátra power plant, dished out half cuts of hog to the generator’s 2,100 staff last month by way of a bonus to “improve their lives”, according to news site Index.hu.

To the cosseted townie in Budapest, the idea of a hauling home a 100-pound pork carcass, and finding space in the fridge, might seem more a burden than benefit.

But, as a caller on a phone-in show on Klubrádió later pointed out, in the countryside, where a pig-slaughter can take the form of village carnival, most probably saw it as a generous gesture: the gift was valued at HUF 50,000, a significant sum to many.

But callers raised other points: Mészáros, of course, is the friend of Prime Minister Viktor Orbán, and a qualified gas fitter who in recent years has seen his businesses blossom, amassing thereby a personal fortune estimated by Forbes magazine to be at least USD 1 billion.

In view of this, half-butchered meat to a value of HUF 1 million or so would be little more than “miscellaneous expenditures” in the family accounts.

Another caller implied the gift illustrated modern feudalism; it was “accepting a gift from the master”, and the whole affair was downright demeaning.

Porcine Present

Then there is the thorny question of tax: how many think Mátra workers will be entering their porcine present as income-in-kind on their personal income tax forms a year next May?

Tax wheeze or otherwise, Mészáros’ munificence was probably a one-off, pig-a-poke benefit (almost literally) and in any case, hardly of significance to the fiscal balance in the grand scheme of things, especially when that scheme itself includes a fully legal tax wheeze.

The SZÉP Kártya (“beautiful card”) is the state-controlled benefits-in-kind system. It allows employers to grant perks of up to HUF 225,000 per annum to cover accommodation, without paying all the additional taxes and contributions levied on the equivalent salary.

Easier to handle than half a hog, the scheme is hugely popular among Hungarian employers and employed alike.

But is it really right or fair? Sure, it helps hoteliers and its recipients, those with steady, and well paid jobs. But it is disadvantageous to the poor and unemployed: they fail to gain directly, and indirectly suffer, since the tax not collected on these payments could, at least in theory, be channeled to support their relief.

Further, valid only within Hungary, it is, in effect, a non-convertible currency, and as such, deters the free movement of peoples as set out by the EU’s founding principles.

Fringe benefit schemes are popular in other countries, of course, not least France, a founding EU member that sees itself as a bastion of European values.

For your correspondent, however, they are an irritant and deviation from these principles. Employers should pay workers a proper wage for a proper job, the proceeds of which should be spendable as much in Bergen as Budapest.

Back in Mátra, reports say one worker at the generator declined the offer of the half hog out of principle; someone, it seems, was not prepared to put his (or her) snout in the trough.

The Bottom Line is a monthly column written by Kester Eddy, a long-standing and well respected Budapest-based business and economic journalist, who has written for the Financial Times and many regional publications. The opinions expressed in the column are not necessarily those of the Budapest Business Journal. To comment on this column, or on anything else in the BBJ, email the editor at robin.marshall@bbj.hu