Finance Minister Mihaly Varga – Photo: MTI

Finance Minister: 2024 budget ‘defence budget’

Addressing the debate of the 2024 budget in parliament on Tuesday, Finance Minister Mihaly Varga qualified the budget as "a defence budget", saying that in times of war Hungary must guarantee its security, protect families, pensions, jobs and maintain low utility costs.

That is why the focus of the budget is to strengthen the scheme to keep utility costs low and boost national defence, he said, adding that Hungary faced challenges on several fronts such as the protracted war and “failed Brussels sanctions” that had resulted in a serious energy crisis in Europe. The additional burdens in energy prices are costing the country more than 1,000 billion forints (EUR 2.7bn), he said.

Varga said protecting the country’s results achieved so far was the government’s primary task, adding that financial stability was essential for security. A strong economy combined with budgetary discipline were needed in this regard, he added.

The government is committed to reducing inflation to single digits by the end of this year, and inflation is targeted at 6 percent next year, while the economy is expected to grow by 4 percent in 2024, the minister said. The public debt as a percentage of GDP will be reduced to 69.7 percent this year and 66.7 percent next year, he said, adding that a deficit target of 2.9 percent of GDP was slated.

Laszlo Windisch, head of the State Audit Office, called the budget draft “well-founded” and said its targets were realistic. He added, however, that the excise tax revenues may end up amounting to 53 billion forints less than planned.

Windisch also said meeting the budget targets was conditional on the accuracy of the government’s macroeconomic forecasts, adding that the draft “requires institutions of the central budget and municipalities to take further measures of economy”.

He also said the central budget faced payment obligations of an expected 430 billion forints connected with central bank losses in 2023.

Opposition slams draft budget as ‘too little’, unrealistic

The opposition Democratic Coalition (DK) on Tuesday slammed the draft budget for 2024 as “without thought … the budget of idleness”, during the bill’s debate in parliament.

The promise to preserve the government’s previous achievements is “too little for the majority of the country”, party leader Ferenc Gyurcsany told parliament. Public education and health care are deteriorating, and wealth disparity is growing. Meanwhile, the sum total of incomes from wages is down compared with that coming from interests and profits, he said.

Momentum said the budget was driven by “short-term considerations to retain power”, and was abandoning “people, households, companies and local authorities”. Further cuts to municipality funding would “finish off the capital”, Lajos Locsei said. Further, wage hikes for public servants and teachers were wholly missing from the bill, and support for welfare recipients are woefully underfunded, he said.

“Responsible MPs can’t support such a damaging, irresponsible industry and economic policy, environmental destruction, and the destruction of the chances of future generations,” he said.

The Socialists called for the withdrawal of the draft, which they said should be replaced by a “new draft focusing on security”. Party leader Bertalan Toth said that “while a budget should be based on facts and realistic numbers”, the draft before parliament was “a jumbled mix of daydreams and wishful thinking … not even remotely in touch with reality.”

The budget was prepared before the final accounts of the 2022 budget were published, and so in many chapters, the government has no way of knowing what to expect, he said.

The party called on the government to prepare a new draft by October 31, and to raise spending on health care to 7 percent of GDP, welfare spending to 18 percent and public education expenditures to 6-6.5 percent.

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