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Committee to propose that gov't subsidies be contingent on compliance with OET wage agreement

Head of the wage monitoring committee Antal Rogán (Fidesz) on Wednesday said the committee is preparing a bill under which the fulfillment of the wage agreement on the National Interest-Coordination Council (OET) regarding low- and middle-income employees would have to be observed until January 2014 as a condition to the disbursement of government subsidies and government preferences.

Rogán said the bill could be submitted to parliament as early as May.

The committee's expectation is that employers in Hungary should raise wages by 4-6% in 2011, in line with the wage rise recommendation approved in OET – including the representatives of labor organizations, employers' organizations and the government – for 2011, primarily focusing on low- and middle-income employees, he said.

The governing party formed the wage monitoring committee to ensure that employers raise wages to compensate those whose net wages fell with the introduction of a flat 16pc personal income tax rate and the reduction of tax discounts. The amended personal income tax regime hit those earning less than HUF 300,000 per month and having no children to enjoy the new, increased family allowances.

Rogán said the wage monitoring committee will be conducting talks on the matter of state-owned companies' employees in the coming weeks, and will then go on to meet large employers in the business sector. Rogán said they wish to see the task of the committee completed by May.

Speaking after the committee met with representatives of the biggest state-sector employers on Wednesday, Rogán said large state-owned companies have already carried out the wage compensation of January 1 with regard to the overwhelming majority of their more than 130,000 employees.

The meeting was attended by representatives of the Budapest transport company BKV, the state-owned Hungarian Electricity Works (MVM), Magyar Posta, the state-owned railways MÁV, the National Asset Management Company and the Hungarian Development Bank.

Rogán noted that the cases, where the compensation has not been carried out yet, primarily concerned enterprises in a contractual relationship with the state-owned companies. This concerns around 3,000-4,000 employees. Rogán added that the wage agreement has not been reached yet at BKV.

Wherever the wage compensation has not been carried out yet, Rogán said, the government expects companies to do that with retroactive effect to January 1. At state-owned or municipally-owned companies struggling with financial difficulties such as BKV or MÁV, however, it is possible that the wage compensation could be carried out with retroactive effect only to March 1, based on agreement with employees, Rogán said.

In the state sector, he said, the wage compensation will definitely be carried out by the end of March.