The Government is aiming to establish a non-profit public utility service provider sector in which profits are re-invested into the activity of the institution, Minister of State for Economic Strategy and the Hungarian President of OECD’s National Council Zoltán Cséfalvay said at a press conference for presenting the OECD Economic Survey of Hungary in Budapest.
He emphasised that in Europe no real, liberalized energy market exists, competition in this field is almost non-existent and monopolies have been driving prices higher.
Mr Cséfalvay stated that the Government intends to establish a non-profit public utility service sector in which profits are re-invested in the activity at issue. The Minister of State added that as far as energy prices are concerned the fact that they used to be one of the highest in Europe needs to be taken into consideration.
Download
He stressed that in 2013 economic growth not only revived, but its basis has shifted from exports to investment and household consumption, which are significant developments. In his view, the consolidation of the Hungarian taxation system has been concluded, the system has reached its final structure and only some fine-tuning may be necessary.
Responding to the OECD’s proposal recommending the introduction of property, inheritance and wealth taxes the Minister of State emphasised that the tax reform has been completed. He pointed out that in Hungary the number of privately owned detached houses is high, thus the introduction of a property tax would adversely affect some low-income owners -- whose only asset very often is their house – therefore “such a tax is currently not under consideration.”
Initially, he added, in 2010 and 2011 extra taxes were direct levies and these were subsequently replaced by taxes on consumption which play a key role in maintaining fiscal balance. Mr Cséfalvay stated that the OECD also proposed the introduction of energy and environmental taxes, but it is not realistic either, as the existing taxes are already above the relevant OECD average.
Download
With regard to the ban on shopping mall constructions he explained that some Government measures, such as this ban and the transformation of tobacco retail trade, are significant not only from a purely economic aspect, as these serve to remedy certain negative externalities, that is, they had been prompted by healthcare or environmental considerations.
Mr Cséfalvay added that the Government measures introduced thus far have assisted many foreign currency debtors and thanks to the Government’s public administration development strategy, the Magyary Programme which is to be continued in the future, the administrative costs of SMEs and households have decreased. In addition to overhauling the taxation system and implementing institutional and regulatory reforms, the Government has also transformed public administration and the labour market, the Minister of State stated. Referring to the conclusions of the OECD on the Hungarian labour market he explained that in the view of the Government enterprise zones could rather be a solution than regional minimum wages. In his opinion, the Hungarian minimum wage is already low not only from a European but also from a regional perspective and it would make no sense to further differentiate it. With regard to investment projects, Mr Cséfalvay said that the Hungarian investment ratio is not lower than the European average; however, further steps must be made to increase it.
(Ministry for National Economy)
