Bill submitted by govt would raise 2013 deficit target to HUF 871 bln

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Hungary's National Economy Minister on Friday submitted an amendment to the 2013 budget act that would raise the central government deficit from about HUF 842 billion to HUF 871 billion. The bill, published on Parliament's website, puts central government revenue at HUF 15,323.8 billion, up HUF 10 billion, and central government expenditures at HUF 16,195.2 billion, up HUF 39.4 billion. At present, the revenue target is HUF 15,314 billion and expenditures are set to reach HUF 16,156 billion. The minister said in the bill's justification that the changes were necessary because of decisions taken since the 2013 budget came into effect and "needs for clarification that emerged in the course of the law's application". The minister noted that the increase in the central budget deficit would not raise the general government deficit, calculated either with cash flow or accrual-based accounting because money is being shifted between the local council sub-system and the central one. The changes causing the deficit to increase are HUF 20 billion in additional expenditures related to state support for the consolidation of municipal debt and HUF 9.5 billion more in spending related to the central government's takeover of healthcare activities from local council-owned companies. The government will give one-off budget support to local councils of towns with more than 5,000 inhabitants to pay off their debt items of less than HUF 250 million, the proposed amendment shows. Helping the municipalities to pay off the large number of small-size debt rather then taking over such debt will ease the procedure, the bill said. An amendment earmarking HUF 10 billion in subsidies to support minimum wage rises in struggling industries will have a neutral on the budget balance, as it will be paid from reducing the target of wage compensation subsidies for public sector workers by a similar amount, to HUF 79.5 billion. The government said in December it would provide companies in the building, textile and woodworking sectors, among others, with subsidies, available for the first half of 2013, to support a minimum wage rise.

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