The government will announce in February structural reforms that will result in HUF 600 billion – HUF 800 billion of savings, National Economy Minister György Matolcsy sad at a conference organized by business daily Napi Gazdaság on Tuesday.
In mid-November, Matolcsy said the government would announce structural reforms in the spring.
Matolcsy told the conference that the taxes paid in Hungary as a proportion of GDP would fall from 38% now to 33% in 2014.
Matolcsy confirmed that mandatory private pension funds, one of three pillars in Hungary's pension system, would “cease to exist”, leaving only the state's pay-as-you-go system and voluntary pension funds.
Parliament has approved legislation that no longer makes joining private pension funds mandatory for career-starters and allows existing members the choice to join the state pension system by the end of 2011. It also approved a bill suspending payments to private pension funds for 14 months from November.
The government will use the smaller part of the wealth accrued in the private pension funds – HUF 530 billion in 2011 and HUF 250 billion in 2012 – to offset the deficit of the state pension fund, Matolcsy said. The remainder will be spent to reduce state debt, cutting central budget interest expenditures by HUF 300 billion – HUF 400 billion a year, he added.
The conditions for the future operation of the mandatory private pension funds will be announced in the coming days, Matolcsy said. (MTI-Econews)