The budget bill for next year is in line with the Government’s key objectives formulated in 2010 which aim to improve employment, cut general government debt, keep the level of government budget deficit below 3 percent – in other words, to pursue a sustainable and stable fiscal policy, Deputy State Secretary Péter Benő Banai stated at a three-day conference on municipal fiscal and taxation affairs held in Eger.

As another key social policy goal he mentioned that a demographic U-turn must be achieved. The Deputy State Secretary said that, according to their calculations, the number of enterprises benefiting from the incentives of the Job Protection Action Plan will increase. He added that the total amount of funding within the Start work programme will increase by HUF 30bnm and thus under this scheme more people will be able to work for a longer time.

Péter Benő Banai emphasised that next year’s budget projects further decrease of general government debt. He pointed out that there are some processes in Hungary which run counter to those in the EU, as while the average level of government debt within the EU has been on the rise, it has been falling in Hungary. He added that the budget of next year also expects GDP growth of 2 percent, while government deficit is anticipated to remain below 3 percent.

The Deputy State Secretary also spoke about the family tax allowance system introduced in 2011, which will continue with another incentive that makes the amount of family tax allowance deductible from personal contributions. This element will provide HUF 50bn for families, he stressed, adding that the parental benefit extra system will facilitate more flexible employment for mothers with small children.

He underlined that economic growth may facilitate some extra funding, such as those required for hiking teachers’ wages which would increase expenditures by more than HUF 150bn, but some HUF 50bn more will also be allocated to the healthcare system in 2014.

He finally remarked that the costs of servicing government debt will be HUF 80bn lower next year, as compared to last year the financing of Hungarian government securities has become much cheaper.

(Ministry for National Economy)