In January the Ministry for National Economy –based on the relatively favourable preliminary data of the central state budget- assumed that the target deficit of 3.8% for the year 2010 would be met. However, the results of the revised reports of the municipalities already forecast an overrun.
A key element of the wellbeing of people is the efficient organization of public transport. The advantage which Hungary enjoys is that it has a dense transport network in a European comparison.
Because of the policy of the past eight years which had been based on overspending, high budget deficits and accumulating public debt, the financial crisis which erupted in autumn 2008 pushed the country into such a situation that we could avoid bankruptcy only by the help of international credits.
According to the analysis of the Ministry for National Economy, it is not in the interest of Hungary to join the Competitiveness Pact as Hungary is already taking all the necessary steps outlined in the EU’s structural pact. Furthermore, the Széll Kálmán Plan contains even more ambitious measures while sustaining the independence of the tax system.
The fraction union of FIDESZ-KDNP, the presidencies of the ruling parties and the Government of Hungary made a political decision to launch the Structural Reform Programme. The programme is aimed at consolidating the Hungarian public sector by means of structural reforms, strengthening economic growth, encouraging the increase of employment and enhancing the competitiveness of Hungary’s economy.
As a sine qua non of Hungary’s renewal, we must establish a higher education offering competitive knowledge. A successful and rising country needs to permanently augment the capacities of fresh and creative knowledge that does not go without a modern higher education to meet labour market expectations as well as the actual demands of the economy and of the society.
Currently in Hungary much more is being spent on support related to disability than in other countries which are at a similar stage of development or which have similar healthcare parameters. In Hungary the number of handicapped people with a job is very low, and the support system is only favorable for some privileged organizations which are invested with special rights.
In the past few years the Pension Protection Fund required a contribution of 600-700 billion forints from the central budget. What is more, the state pension system would have closed with a deficit of 800 billion forints in 2011 but for the measures of the Orbán government in 2010.
With continued economic policy efforts to put businesses at the forefront, the Government is planning moves to make the entrepreneurs’ life easier through administration cuts as a part of structural reforms on the agenda. For Hungary to regain its leading position in the region and to become one of Europe’s most business-friendly countries, it is inevitable to ease the administrative burden on businesses that could weaken competitiveness of those.
The key indicator to judge the competitiveness of an economy is the amount of general tax liabilities. If enterprises consider administrative costs too high, they may opt to scale back production and investments or would-be investors may decide not to come to Hungary. As a result of the tax measures implemented during the last couple of months, the tax burden fell to 37%, but it is still more than the average of the Visegrád group members.