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Parliament approves 2011 budget

Hungary's parliament on Thursday approved the 2011 Budget Act with a vote of 257 ayes and 119 nays. There were no abstentions. MPs decided to ask the President of the Republic to publish the act with urgency.

The budget shows revenue of HUF 13,151 billion and expenditures of HUF 13,838 billion to create a deficit of HUF 687 billion, in line with the government's accrual-based target of 2.94% of GDP.

The pension fund is set to break even with revenue and expenditures of HUF 3,074 billion. The health fund is expected to have revenue of HUF 1,370 billion and expenditures of HUF 1,459 billion, creating an HUF 88.6 billion deficit.

The "extraordinary government measures" line, earlier "general reserves", shows HUF 90 billion.

Interest expenditures are projected to reach HUF 1,052 billion in the act.

Assets returning from the private pension pillar to the state pillar in a rollback of Hungary's pension reform show up on two lines in the budget: HUF 434.3 billion will be paid from the Pension Reform and Tax Reduction Fund into the Pension fund and HUF 94.5 billion will go into the central budget.

The budget shows HUF 187 billion of revenue from the extraordinary bank levy and HUF 161 billion from "crisis taxes" on the telecommunications, energy and retail sectors.

Revenue from personal income tax is set to reach HUF 1,363 billion. Within this, revenue from a special tax on severance pay will generate HUF 1 billion.

The act eliminates the HUF 836 million budget of the Fiscal Council, an independent body established by the previous government to review fiscal policy.

The act allocates HUF 22 bilion to ensuring public sector workers' regular net income does not drop in light of changes to taxes and contributions.

The act allocates the same amount of support for political parties that took 1% or more of the vote as in 2010: HUF 1.05 billion for Fidesz, HUF 521 million for MSZP, HUF 448 million for Jobbik, HUF 249 million for LMP and HUF 232 million for KDNP.

The biggest change to the bill made during debate was that resulting from the establishment of government offices for counties and the capital. The allocation for operating the offices was originally HUF 7.5 billion but was raised by HUF 80 billion before the final vote. (MTI-ECONEWS)