Government supplements economic protection action plan

He said the government would subsidise two-thirds of payroll costs in December and January at businesses forced to close temporarily because of the epidemic. He added that those shuttered businesses, such as restaurants, hotels and tourism companies, including privately-owned bus companies, would also be exempt from payroll tax during the period.

He said the local business tax would be halved for small- and medium-sized enterprises and sole proprietors from January 1. These businesses account for the most workplaces and are also the most vulnerable during the epidemic, he added, explaining the measure.

Orbán said the government would subsidise the resulting municipal revenue shortfall in settlements with fewer than 25,000 residents, while the situations of bigger cities would be weighed on a case-by-case basis.

Lastly, he said families with one or more children or with a baby on the way would be eligible for a 6 million forint (EUR 16,800) preferential loan, capped at 3 percent interest, for home renovation. The principal will be reduced with a 3 million forint government grant when the renovation is completed, he added.

Orbán said that not only health must be defended against the virus, but the economy and jobs, too.

“Every life and every workplace counts for us,” he added.

Opposition parties slam plan

A number of opposition parties criticised supplemental measures to the government’s plan to shield the economy from epidemic fallout announced by Prime Minister Viktor Orbán on Saturday. The spokesman for the Democratic Coalition (DK) said the government had “dug deep into the pockets of municipal councils” by halving the local business tax.

The party called on the government to instead waive the corporate tax and give direct support to businesses in trouble as well as people who have lost their jobs because of “insufficient government action to protect workplaces”, Balazs Barkoczi said.

Jobbik head Peter Jakab said in a message on Facebook that the government’s pledge to cover two-thirds of payroll costs in sectors forced to shutter because of the epidemic was “too little even for cosmetic relief”, adding that no mention was made of raising job-seekers’ benefits.

The Socialists’ co-leader Bertalan Toth said a reduction in the VAT rate on staples or an increase in job-seekers’ benefits would have helped, but “the Fidesz regime again does not provide assistance to people struggling to get by”.

Budapest Mayor Gergely Karacsony, the co-chair of Parbeszed, said in a statement from the party that halving the local business tax “will not manage the crisis, but make it worse”.

Ruling Fidesz group leader Mate Kocsis said in response to Karacsony’s comments on Facebook that reducing the local business tax was unavoidable for SMEs to survive the economic consequences of the pandemic and to help them keep jobs. He added that Budapest’s businesses did not have hundreds of billions in reserves, unlike Karacsony, who inherited it from former Mayor Istvan Tarlos.