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Gov't to spend HUF 17 bln on local council wage compensation

The government will allocate HUF 16.9 billion from its 2011 budget to compensate for the net wage loss of workers at local councils and their institutions caused by this year's tax and contributions modifications, the official gazette Magyar Közlöny wrote on Thursday.

The gazette published the government's act to allocate HUF 16.9 billion from the budget to the chapter of local councils.

Parliament passed legislation last December allocating HUF 22 billion to ensure public sector workers' regular net income does not drop due to changes to taxes and contributions.

About half of the cost would be covered by VAT revenue, another half would consist of revenue from personal income tax, pension insurance and health care contributions.

National Economy Minister György Matolcsy said last year in an interview that the changes in taxes and contributions would affect 690,000 public sector workers and about HUF 25-30 billion would cover their compensation.