Good morning, Ladies and Gentlemen.
To be the last speaker is both a rewarding position and a thankless one. Today I feel rather grateful for it. Protocol demands that I take this opportunity to respond to some of the points raised by the previous speakers, and then say what I have to say. The three speeches that we’ve just heard are proof that the Hungarian government doesn’t suffer from a poverty of ideas. So we can’t say that we’re short of ideas; we’re doing well in the production of ideas – and also in the production of innovative ideas. This strengthens my hand, because when a country has a government like this, it’s the Prime Minister’s job to organise the plethora of innovative ideas into a viable system.
Perhaps the most important question, which [Central Bank Governor] György Matolcsy presented to us is this: what will the rate of GDP growth be, and how quickly will we return to the economic performance we had before the pandemic? We heard alarmingly high figures, including a GDP growth rate of 6 per cent. At times like this, one always goes back to one’s textbooks and reliable sources of knowledge, to judge something against reality. In my case, this means going back to the novels of Jenő Rejtő. What flashed into my mind was the scene in one of Rejtő’s novels in which our hero is offered a reward of one hundred dollars for information in an investigation. He replies, “Give me ten dollars instead, because I’ve seen that amount before, and I know it’s real!” I was reminded of this when a GDP growth forecast of perhaps over 6 per cent was mentioned in this room. I’d like to come back to this later, because GDP growth – which I also hope will be higher than most people expect, and for which our Finance Minister has very rightly made a conservative estimate in the budget plan – will raise the question of what should be done with the resources that are thus created, where they should be directed and what they should be used for. I’d like to talk about this later.
The Governor of the Central Bank said that we must avoid post-COVID syndrome not only in health care but also in the economy; and he also gave us a definition of what he means by this. I agree with him on this: a means of counteracting post-COVID syndrome – post-pandemic uncertainty or re-infection – is full employment.
Another such issue is the question of the debt repayment moratorium, which we mustn’t suddenly terminate; we must instead agree on a sensible timetable for phasing it out. All I can tell you here is that the moratorium – which the previous speakers proposed should be terminated – has been extended in its current form by the Government. We’ve extended it until September in order to give us time to reach an agreement with the Banking Association and the National Bank on exactly what changes should be made, and how. By the way, I’d like to say in advance that in this matter I’m a “cautious bull”. I understand people – especially those involved in finance and banking – wanting to get back to the normal, earlier debt repayment regime as soon as possible, but I’m convinced that if we’re not careful we’ll make an overcorrection. So we need to create a cautious exit strategy, which is still a matter for negotiation.
When he talked about balance, the Governor of the Central Bank raised a very difficult question. How do we get back to a tolerable budget deficit level – and, in the long term, not budget deficits but balanced budgets? So not back to a deficit of 3 per cent, but to one under 3 per cent – or zero per cent? And how can we move to a budget that at some point will be in surplus? Because, after all, a normal country can’t aim for less than that. If I’ve correctly understood the Governor of the Central Bank, we have a scenario with which he’s not entirely happy, as he’d like to move faster. Our scenario is that, starting from the 2020 budget deficit of 8.1 per cent, we should bring it down to 7.5 per cent this year and to 5.9 per cent in 2022. Counting on higher GDP growth, the Governor says that clearly if there’s a surplus in the economy we should primarily use it to reduce the budget deficit, to at least use it to reduce the deficit. It’s not for me to decipher the deeper meaning of his words, but he said that instead of – or in addition to – using it in the real economy or on welfare measures, we should spend money on reducing the budget deficit. I want to be clear that I don’t see the 3 per cent that he’s proposing as being achievable, so for 2022 we’ve planned to reach 5.9 per cent; going back to 3 per cent in one step would be a shock which Hungary’s real economy – and, I think, households – could hardly bear. So for the time being, for 2022 I’m basing my calculations on the 5.9 per cent deficit in the 2022 budget, which I hope will be adopted by Parliament next Tuesday.
We’ve just heard of the commencement of a cycle of cautious – or at least I hope cautious – and moderate interest rate increases. And at the same time, if I correctly understood what the Governor said, we’ll also see the winding up of one of the most important support programmes for Hungarian businesses, especially small and medium-sized enterprises: the “NHP Hajrá” [Growth Credit Programme “Go for it!”]. This is because this is a crisis management tool. These will be two shocks for small and medium-sized enterprises – because large businesses will tough it out, thank you very much, and perhaps they’ll have easier access to the bond programme. But I think that this “double whammy” for Hungarian small and medium-sized enterprises is something that we’ll have to offset.
And here I’d like to refer to what President Parragh said about the Széchenyi Card. I think that in a situation like this, accepting the Governor of the Central Bank’s approach to these measures – because, among ourselves, we couldn’t do otherwise, as the Central Bank is independent – then the budget should provide resources for cheap, subsidised funding for small and medium-sized enterprises at an interest rate of no more than 0.5 per cent. This is something that the Hungarian budget cannot avoid. This is being thought through now. I’ll make no secret of the fact that we’re also consulting with the Chamber. The internal structure of the NHP was something like a two-thirds allocation for working capital loans and about one third for investment. This will now come to an end, and we must make up for it. And I’m convinced that the KAVOSZ system [of credit for small and micro-businesses], the Széchenyi Card system, will be by far the most successful and flexible system enabling us to use budget resources to compensate for losses resulting from the ending of the NHP. So in this changed environment, with higher interest rates and no NHP, I’d like to engage in very important cooperation with the President of the Chamber and the Chamber, offering them substantial budgetary resources to provide small and medium-sized enterprises with no less credit than earlier – and on perhaps even cheaper terms. We’ve tried to do something similar through the Hungarian Development Bank, which I’ll also talk about, having signed or delivered on something like 7,000 contracts. This won’t be enough, so we’ll have to find a more flexible solution. Therefore, after the change in monetary policy, instead of the traditional state institutional system for support of small and medium-sized enterprises we’d rather work with KAVOSZ, the Chamber and the Széchenyi card system. The Minister of Finance says that we shouldn’t say things like this, but in the interest of clarity I’ll say that there will be no upper limit. Because either we want full employment, and as small and medium-sized enterprises will have to employ a lot of people, we’ll have to give them the means to do so; or if we don’t give them the means to do so, we’ll have to accept something less than full employment. Yet full employment is our strategic goal.
Having said that, I’d like to respond to the comment made by the Governor of the Central Bank on the issue of data reform, which I consider to be a crucial issue. One of the most important tasks over the next four years – during which we hope to be running the Government – will be to define the place of data management and IT in the government structure far more optimally than is currently the case. Today it’s fragmented, and we’re trying to implement government policy in this area with a sector-by-sector system. Our performance is no better than middling, and we won’t be able to improve on this until we bring data management and IT together in the institutional system of government. After the 2022 election we must do this work without fail.
And one last point – before I take up all my time with my comments – is the issue of the minimum wage. I understand the international comparisons. My chart is more nuanced than President Parragh’s, because the Hungarian minimum wage system consists of two elements, not one. And what we’ve seen includes the minimum wage but excludes the guaranteed wage – which is another minimum wage element in the Hungarian system. If we take both of these into account, by international comparison we look somewhat better than what we’ve seen here. But anyway, this is just a methodological remark. At all events, our aim should be a minimum wage of 200,000 forints. At the same time we must also accept that if we impose a minimum wage of 200,000 forints on Hungarian small and medium-sized enterprises in one step, they’ll go bankrupt, as they won’t be able to pay it. And if they can’t pay it, and they go bankrupt, then people will be made redundant. And then we won’t have full employment, but unemployment. Therefore if we want a higher minimum wage – and I repeat, a minimum wage of 200,000 forints is my aim – in one or two steps, which we’ll negotiate with the Chamber and the trade unions, then obviously we have to help small and medium-sized enterprises pay that higher minimum wage. The only way we can do that is with an appreciable reduction in the taxes they pay. Earlier we had an agreement on the minimum wage, and we did quite well with it in recent years. Employers agreed to a certain minimum wage increase, the trade unions accepted it – and even supported it – and the Government reduced payroll taxes and contributions at a planned rate. This is the combination that we need to apply in the future, and then we can put the figures into an agreement that we need to negotiate. So my suggestion to President Parragh is that we should get down to work and – thinking one, two or three years ahead – conclude a comprehensive agreement on the minimum wage. And we shouldn’t set our sights lower than 200,000 forints. I think that those are perhaps all the comments I have.
What should people gathered at an economic policy forum expect from the Prime Minister? Certainly not a discussion of economic policy. They should far rather expect an explanation of how the economic policy thoughts, ideas, proposals and considerations expressed by the previous speakers – who are responsible for the content of Hungarian economic policy – will somehow be incorporated into a national strategy. They should expect to hear how this will fit into a national strategy for leadership of the country. At a time like this, when we’re in such a difficult situation, needing to relaunch an economy, it’s very important for us to repeat a few axioms.
The first thing – and this is our starting point in implementing specific economic programmes – is that the challenge is not governmental in nature. So we’re not dealing with a political challenge, but with a total economic and social challenge that spans the whole of society. If the challenge is neither governmental nor political in nature, then the response cannot be purely political and governmental – in other words, it can only be based on very broad cooperation. To enable the Government to relaunch the country, there must be a very broad coalition with all the players in the economy, in the areas that concern them or that they influence. But this will not work without unity and consensus.
The second axiom that needs to be repeated at times like this is that economic policy cannot be made on a party-political basis. This fact is clearly demonstrated by the composition of those gathered here; because economic policy can only be made together with people who can run an economy, who have capital, who have experience, who have technology, who have industry, who develop, invest and provide jobs. And this isn’t a party-political issue. When you need to relaunch an economy, you need everyone.
And the third axiom is that in this situation you cannot have an election budget. There will be an election, but if we have an election budget there will be no relaunch. We must therefore have a relaunch budget. This is the spirit in which we’ve submitted the 2022 budget. I think these are the axioms with which it makes sense to start talking about economic policy.
As regards the magnitude and gravity of the task, I can tell you that I’ve seen many things. At least up until now I thought I’d seen every kind of crisis: I’ve seen floods, I’ve seen red mud, I’ve seen foreign currency debt, I’ve seen financial crises and I’ve seen migration. I’ve even seen war – fortunately only from the sidelines in 1999, when I was also doing this job, and there was a war here in our neighbourhood and we had to intervene as a NATO member. So I thought – immodestly, I now admit – that no one could show me any new type of crisis. I can even mention the crisis that President Parragh mentioned: the crisis, the international crisis, caused by a terrorist attack on the Twin Towers. But the situation in which we now find ourselves, the circumstances that surround us, are completely new to me as well. So we’re all sailing in uncharted waters. No one has ever seen a crisis like this: a pandemic that paralyses the entire world economy, not regionally, not in certain parts of it, not just among certain groups of people; a pandemic that attacks everyone – except perhaps the young – in every part of the world, in every economy, endangering almost every ethnic group. We’ve never seen the world economy shut down by such a crisis, nor have we seen the looming need for such a post-crisis relaunch. We must therefore approach the task before us with due modesty and humility. Past experiences aren’t irrelevant, they’re useful; but we must be aware that they’re not definitive, because we’re in a new situation. Let’s look at where we are.
The first and most important thing is that in this crisis almost everyone in Hungary has stood their ground. So I can’t name any group in society that has collapsed. Despite the fact that we’re always disparaging it for some mysterious reason, I’m not just talking about our healthcare system turning out to be one which performs better than most healthcare systems in Western Europe when it needs to perform at its best. I’m not just talking about our doctors and nurses being better than those in other European Union countries – perhaps not all of them, but certainly most of them, most of their nurses or doctors. And I’m not just talking about the organisational character of our healthcare system and its capacity for decision-making and action being in no way inferior to – and even better than – those of several richer EU countries. During the crisis all this has become abundantly clear. But these aren’t the only ones who have stood their ground: almost everyone has. For example, we had to switch to online teaching overnight, and although we certainly lost students whom we couldn’t reach through online teaching, the Hungarian teaching profession, the education system, parents and children all made the transition in a way that previously no one would have thought possible for us to do so quickly and effectively. Likewise, families have not collapsed, and family impoverishment is not spreading like wildfire through Hungary. This is despite the fact that some parents, usually women, have had to stay at home with their children, especially younger ones, because online education doesn’t provide security and supervision at the same time – it doesn’t provide the security of school. So they had to stay at home and provide their children with the security of home, when otherwise they would have had to work according to the former logic of the family budget. And they all stood their ground.
The situation is similar with businesses. Of course I see that it’s been hard for everyone, everyone has struggled, but overall, if you look at the employment figures, you’re always struck by two things: people want to work, Hungarians want to work; and businesses want to give them work. This is also exactly how it’s been during the crisis. So while all of us without exception have been dragged down by this crisis, we Hungarians can safely say that we’re part of a community that in times of trouble has been able to stand its ground and perform well in every area of its life. This is a great lesson from this crisis and it gives us encouragement for the future. I think it’s particularly important that the number of people in work in Hungary today is over 4.5 million, over four and a half million; and that this is only 50,000 fewer than in the corresponding period in 2019. So we’ve lost 50,000 jobs. And this year, not only do we have to make up for that, but we want to create a further 50,000 jobs. So we’re not only keeping our commitment to creating as many jobs as the virus destroys, but we have to go beyond that and create twice as many jobs as the virus destroyed. This is possible, the Hungarian economy has the potential for this.
And at such a time we can look at others and then ourselves with a certain amount of self-respect: the unemployment rate in Hungary is just over 4 per cent, while in the eurozone economies it’s 8 per cent. It’s only logical for me to thank everyone for standing up for us, and I’ll do that in various ways. I must thank Governor György Matolcsy, who’s here today, and who – as the head of the Central Bank – has financed these sixteen months of crisis and has provided the money to make the Hungarian economy work, creating the money to make the Hungarian economy work. We owe a debt of gratitude to Finance Minister Varga Mihály, because he’s led the economic defence operational group, which took the decisions that you saw on the screens here. And once again I thank the Hungarian business community and the chamber representing them for being our partner throughout this difficult period, and for bombarding us with ever more proposals.
Now the economic protection phase is coming to an end, and the economic relaunch phase is beginning. Here again we’ll need operational groups. Sándor Demján, God rest his soul, is no longer with us. Many of us here in this room learned a great deal from him – I learned a great deal about economic policy. I’ll just quote two thoughts of his, which are the most instructive and relevant. This will sound natural today, but when he said it here in the mid-nineties, it was taboo. He once said that there is no normativity in a crisis. Which, if I translate it into somewhat political language, means that you cannot solve a crisis with consistent economic policy organised in line with liberal principles. The latter brought austerity, if you remember: austerity is normative. The management of an economic crisis cannot be normative: it’s necessary to depart from the principle of treating all actors equally – and in particular to treat differently both those who have suffered the most in the crisis, and those who can offer us the most for escape from the crisis. This isn’t normativity: it’s a targeted approach. In this sphere of policy a targeted approach is embodied by the term “operational group”.
When there’s an operational group, we don’t have normativity, but targeted decision-making. In the same way that we had operational groups when we had economic protection, health and economic protection, we’ll now have two operational groups. We call one of them the Operational Group for the Relaunch of Economic Life. This will be led by Péter Szijjártó. I’m speaking both teasingly and seriously when I say that he’s the only member of the Government who’s able to be in two places at the same time; and so this kind of energy is absolutely essential for the relaunch. And there will also be an operational group responsible for relaunching life in society as a whole, which will be led by Katalin Novák, our Minister for Families. The work that they’ll be doing is, I think, well supported by both the 2021 budget and the 2022 budget, which are relaunch budgets.
Having said this, I’d like to say a few words about the problem of tax increases. When it comes to a global corporate tax, the problem for us is not only one of sovereignty – although it is that – but also of economic policy. So now, if I’ve understood correctly, what I’m talking about is that the global top dogs have decided – driven by their own interests, so not according to ideals, principles, liberalism or any higher considerations, but only their own interests – that they want to spend a lot of money, and then recoup it. And what’s more, they don’t want to allow competition in the collection of this money: they want the guaranteed ability to collect the money, which is why they’ve invented this global corporate tax. But let’s not panic! Looking at the timescale of decisions taken on the basis of OECD positions, I think that by the time anything comes of this, we might have won several more elections. But it doesn’t harm to address this question. And of course I think it’s absurd for any organisation in the world to claim the right to dictate what kind of tax can and can’t be levied in Hungary. This is especially true as we’re not talking about a tax haven, because the low corporate tax rate in Hungary isn’t designed to attract certain companies – let’s call them offshore operations – which simply want to reduce their tax burdens, and against whom action is indeed justified. Our low corporate tax rate is good, because it brings real investment to Hungary. So it doesn’t bring tax accounting practices here, it doesn’t import tax manoeuvring to Hungary, but it attracts real productive investment. Anyone who wants to deprive us of this is depriving us of our ability to attract real investment. So we must oppose this. And of course we must also be prepared for scenarios B and C, so that the overall tax burden in Hungary doesn’t increase, even for companies subject to global taxation – because in that event jobs would be lost here. So in order to protect jobs we must take a clear stand against such proposals; and if we need to retreat, we must have lines of defence which on the whole – and this is a serious task for the Finance Minister – will enable us to maintain our ability to attract and create jobs involving international capital, even with global taxation.
Ladies and Gentlemen.
In the end, we can define a framework – a national political strategic framework – for all the economic policy considerations that have been raised by answering the following question: What will the global economic system, the European economic system and the Hungarian economic system look like after the crisis? This is the million-dollar question. Will everything continue as it was before the crisis, or will there be changes? It’s clear from the presentations here that we’ve been talking about new things, and now we’ve heard some absolutely spine-chilling things, such as digital money from the Central Bank. So here we’ve also seen the far-reaching potential of global upheaval. So these are all signs indicating that politicians or those responsible for governance should think about the question and give a clear answer on whether, when talking about a relaunch, we’re looking at the same economy as there was in Hungary and Europe before the crisis, or whether we’re looking at something new. And I’m afraid that at this moment no one in the world can give an exhaustive and complete answer to that question; the Prime Minister of Hungary, with its ten million inhabitants, is not the only one who can’t be expected to answer it. But I can tell you one thing for sure, which you can use as a compass for your own economic decisions: I think there will be changes. After the crisis there will be changes in both the world economy and the European economy. And since Hungary is an export-oriented country, and its size is what it is, we have to adapt to these changes; and we have to adapt intelligently and well. During the crisis it became clear that the current world economic system – and the European economy in particular – is fragile. And after the crisis the defining characteristic of the world economy and the European economy will be the quest for security. So we’ll all want more secure economies and more secure lives than we had before the crisis: secure ones that can’t be shaken by the kind of crisis we’ve experienced in the last sixteen months. So I think the direction is towards a secure economy. The question is what that means.
I think it means the following things. Firstly it means that we can’t depend on others to protect us against pandemics. So a secure Hungarian economy has to have the capacity for self-defence against the full vertical range of pandemics. This means that we have to be self-sufficient even when there’s no pandemic. This creates the management problem of what to do with our factories and production capacity when there’s no immediate demand for these capabilities or products, but when we still need to have the capacity and production. If we have good economic policy makers and good businesspeople, they’ll be able to sell these products; but at all events, we’ll certainly need to be self-sufficient in hospital equipment, all kinds of protective equipment, medicines and vaccines. This means that the Hungarian economy has to build up full spectrum capacity for the production of Hungarian hospital equipment, Hungarian ventilators, sanitisers and masks. We must now also develop our own vaccines for this epidemic, and we need to have the vaccine development capacity, the intellectual, scientific and laboratory capacity to develop our own medicines and vaccines for the next pandemic much faster than we’ve been able to develop them this time round. The crisis erupted sixteen months ago and Hungarian scientists and laboratory experts are promising a Hungarian vaccine by the end of 2022. It’s great that we can produce our own vaccine, but it’s not enough; it’s especially not enough for a country with Hungary’s intellectual capacity. Hungary cannot take such a long time to produce its own vaccine. So, now that we’re in an age of pandemics, our scientists and specialists operating our laboratory capacity will need to build a much more rapid response capability for future pandemics.
I believe that when we talk about a secure economy, this will also be true for our foreign relations. Hungary cannot afford to stand on its western foot alone: it must also stand on its eastern foot. We can have ideological debates about this, but I’m convinced that this debate isn’t really an ideological one: it’s a simple economic policy fact and an economic policy issue. I don’t think there’s a single person in this room who doesn’t agree with the international consensus that in the coming decades the world economy’s centre of gravity will shift steadily eastwards; and if this is true, we must adapt to this fact. If, of course, we want to be self-sufficient in everything, and we think that a market of ten million people is capable of providing a good standard of living for its citizens, then we don’t need to do that. But I don’t think there’s a single person in this room who’d say that there’s an alternative to export-led Hungarian growth. With a country of this size, with a population of this size, there’s clearly no alternative – even if half or the whole of Romania were included in the V4, as was attempted here earlier. So the fact is that the size we are means that we need to participate in international trade. This means that Japan, South Korea, China, Indonesia and Vietnam are all markets in which we have to do well – because those countries are where the money will be. So we can’t afford to neglect the development of our ability to thrive in those markets. This must involve young people, who mustn’t be deprived of the knowledge that will enable them to prosper in the world by building the right connections not only in the economy of the West, but also in that of the East. So I’m committed to the idea that a secure Hungarian economy must involve the ability to engage equally with both the Western and Eastern economies.
I think that there’s an important task for Budapest – for the tourism industry in Budapest, if I may put it that way. If you look at the business models of the major capital cities that are tourist attractions, like Paris or Rome, you’ll see that there’s a healthy business ratio of domestic tourists to foreign tourists. It’s true that foreigners make up the higher proportion, but there’s a healthy ratio, a good ratio. If you look at Budapest, you’ll see that about 90 per cent of the city’s tourism industry is based on catering to foreigners, and only 10 per cent on Hungarians. This situation isn’t going to be competitive, and it’s no longer viable. It won’t be restored; it not only won’t be restored this year, but in general we won’t see the restoration of an international order in which any big capital city that wants to make money from tourism can afford to ignore its own citizens. So Budapest also needs to build tourism capacity for the use of Hungarians from outside the capital who come to the city and consume or use these services. To do this, in Budapest we need to implement a change to the tourism business model, and I hope that the Budapest Chamber of Commerce or the professional organisations dealing with this will approach us to see how we can help them in this change of direction.
And finally, for a secure economy you need full employment. I want to make it clear that we don’t want to go back to socialism. So a secure job doesn’t mean that everyone will spend their lives in the first workplace they enter. So we can’t guarantee them the job that they chose then. What we – Chamber, the Government and so on – can and must guarantee is that there will be more jobs in Hungary than there are people who want to work. And everyone will get a job somewhere; maybe they’ll have to change from time to time, maybe they’ll have to retrain, but there will be more job opportunities than workers. This is what I call full employment. And then either people can make use of these opportunities or they can’t. If they can’t make use of them, they’ll ask for assistance, and then we can help through our training programme, through our school system, through all kinds of company programmes, so that everyone can find their place, without – and this is very important for a secure Hungary – having to uproot and move from one corner of the country to take a job in another corner. Migration is a bad thing, it’s ontologically bad, if I may put it that way, because it means that one isn’t able to make headway in the place where one was born. Migration from one country to another is a bad thing, and of course it’s in a different category, but within a country it still indicates that something’s wrong. It indicates that we’re not yet a country in which every region is capable of giving every Hungarian the opportunity to create a happy, balanced life that’s in line with their desires and talents, and to settle down to such a life without having to leave home. To achieve this we still have a lot of work to do, and this is why it’s very important that this should be the decisive factor when we utilise the European Union’s budgetary resources over the next seven years.
It’s unacceptable that Budapest’s level of development is somewhere between 110 and 130 per cent that of the European average, far above the European average, while our four worst-off regions are among the twenty worst-off regions in the EU. This is unacceptable! So now when funding is released by the EU, we must send it all, without exception, to these regions – not only because it’s fair, not only because it makes economic sense, but also because we don’t want to turn Hungary’s settlement structure into a collection of megacities, and we want to preserve our villages and towns, including the small and medium-sized ones. So we also need to counter the great trend towards urbanisation that’s emerging through artificial economic pressures, and allow everyone to live their lives where they feel most at home in their own skins.
Similarly, I therefore think it’s important that as soon as possible the Chamber of Agriculture and the Government reach an agreement enabling us to provide a level of support for agricultural investment and subsidies over the next seven years which is three or four times as much as we provided over the past seven years. This will result in Hungarian agriculture not only maintaining its competitiveness, as it’s done so far, but in the improvement of its competitiveness – including that of the food industry. Concluding this agreement is another important task for the next few months.
If we’re talking about a secure economy, then a country with a proportion of pensioners as large as Hungary’s cannot leave them out of that secure economy. And so – crisis or no crisis, epidemic or no epidemic – it’s important that we complete the process of rebuilding the thirteenth month’s pension. We mustn’t backtrack on this, and next year we must provide not only the first weekly instalment of this thirteenth month’s pension, but also the second.
Finally I’d like to talk about one more thing, perhaps the most important: financial affairs. If my understanding of what’s happened to us over the past sixteen months is correct, I can see that families have survived, they’ve fought hard and they’ve survived this crisis; but families with children have been hit hard by this crisis. Many families have had to dig into their savings. We’re talking about lower income families – and the more children they have, the more they’ve had to dig into their savings. And here we come to the question of GDP growth. Even if we daren’t talk about the hundred dollars, but just the ten dollars, because we’ve seen that much before, if there’s higher economic growth, then we need to ask what we’ll do with the resources that are created. What I’ll be proposing to the Government this afternoon, by the way, is to do something that no one’s ever done before. For Hungarians this isn’t a form of criticism, but praise: we’re not the most cautious of peoples. I’m not talking about 6 per cent GDP growth, but 5.5 per cent; and as we’ve budgeted for 4.3 per cent, if we manage to achieve 5.5 per cent GDP growth there will be big reserves in the budget. So if we can achieve 5.5 per cent growth, then in January and February 2022 we’ll simply give parents back the tax they paid into the budget in 2021. All of it. Let’s set an upper limit, because the richest probably don’t need it: let’s set it somewhere around the average income. So I’m talking about the tax paid on average incomes, with the tax paid on average or below-average incomes being given back to the parents in families with children so that they can rebuild their savings, so that families can reorganise their budgets and get family budgets back to normal. According to our current estimates, this will be an amount of between 550 and 580 billion forints. It’s a very large amount. I suggest that we don’t distribute it evenly or randomly, but simply give it back to those who worked for it, who earned it, and who then paid it into the budget. This is if – thanks to Mihály Varga – economic policy is so successful that we can take this step. I’m not saying that this is exactly the kind of recognition that finance ministers dream of getting for their work, but ultimately in such a decision its worth recognising the success of fiscal management. Well, I very much hope that we can get the Government to approve this proposal at this afternoon’s meeting.
Ladies and Gentlemen,
In conclusion, I’d like to say that, since this situation can’t be dealt with by the Government alone, in the coming months – the months of relaunch – it will be essential to maintain constant contact with economic players. Therefore I respectfully ask the Chamber to maintain and strengthen our daily or weekly professional contacts, in order to work together on relaunching the economy. And I suggest that sometime in the middle or end of the third quarter, when we have a better understanding of where we stand this year, we come together again for a similar conference to discuss what parts of our plans we’ve achieved, what we’ve been able to implement, and what we’ll still need to do in the last quarter of the year in order to achieve the goals that I’ve just talked about: the building of a secure Hungarian economy through the relaunch.
I’m grateful for your attention.
