Although the Hungarian state assumes a role in providing loans for enterprises, but “normally” it is the task of commercial banks to lend to enterprises in line with their business models which are also assisted by state incentives, Minister for National Economy Mihály Varga said at the fourth annual conference of the Association of Hungarian Insurers (MABISZ) in Budapest.

Speaking about the flat-rate income tax system, the Minister said that the Government has been hoping that the new tax scheme will boost consumption. The effect, he added, is hard to evaluate as yet, but the system is worth testing for another year.

Mihály Varga demonstrated with figures and graphs Government efforts over the past three years aimed at stabilizing the country’s economy. From among structural changes the Minister singled out the cutting of expenditures related to education and local governments, but in his opinion the number of public sector employees is still too high, as every fourth or fifth person receives his wage in this sector.

He underlined among the Government’s achievements that “the past three years were managed without a crash.”

As far as foreign currency loans are concerned, the Minister stressed that the previous Government was trying to spur economic growth through excessive lending, and the adverse effects of that period are still present.
Mihály Varga emphasised that the Government intends to help maintain the number of employees in the sector at 40 thousand, and he was requesting proposals for meeting this goal.

In her presentation, MABISZ President Anett Pandurics made a request for a tax break on personal income tax for life insurance policies, such as that granted for voluntary pension insurance policies and retirement savings accounts. Such a measure, in her view, would not cause a fiscal shortfall, as insurance companies are already holders of government bonds worth some one thousand billion forints, and in case life insurance premia were rising, the amount of government securities insurance companies purchased would also increase, the President said.

(Ministry for National Economy)