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Gov't proposes at least 4.5% minimum wage rise

The government proposed to employers and unions at a meeting of the National Interest Coordination Council (OET) on Friday raising the minimum wage at least 4.5% to HUF 76,800 per month from January 1, 2011.

The government proposes raising the minimum wage for people with vocational degrees by at least 3.4% to HUF 92,500, National Economy Minister György Matolcsy said.

The government proposes raising gross wages in the private sector at least 5% in 2011, over the rate of inflation, Matolcsy said.

The government projects 3.5% average annual inflation in 2011.

With the introduction of the flat-rate 16% personal income tax from 2011, a 4.5% minimum wage rise will not cause anybody a loss, Matolcsy said.

Ferenc Dávid, chief secretary of business association VOSZ, said the government's proposals were “realistic” and “close to an agreement”.

Péter Pataky, who heads unions association MSZOSZ, said unions were dissatisfied with the government's proposals because they would just compensate for the changes to the tax system, leaving net wages flat while the government targets a 3.3% increase in labour productivity and 3.5% CPI. (MTI Econews)