The reduction in overhead costs has materially benefitted the financial situation of the population, Minister of State for Parliamentary Affairs of the Ministry of National Development János Fónagy stated at a press conference evaluating the achievements of the first year of the overhead cost reduction policy, held in Budapest on 15 December 2013.
It had been on 15 December 2012 when the government decision on the 10 percent reduction in the end consumer prices of electricity, natural gas and district heating was published.
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According to official statistics, an average Hungarian family had spent one third of their total income on overhead costs before, János Fónagy recalled. It was on 6 December 2012 when the Government announced that the prices of household gas, district heating and electricity would be reduced by 10 percent as from 1 January, 2013. There was a government committee set up thereafter in order to follow up on the overhead cost reduction, the Minister of State added.
As of 1 July, 2013 there was 10 percent reduction furthermore in water, sewerage and waste disposal fees as well as in the prices of sewage, PB gas and chimney sweeping. In accordance with the Government’s intentions, the Parliament reduced household gas, electricity and district heating prices by another 11.1 percent as of 1 November this year. The most significant items under overhead costs have thus become 20 percent cheaper than this time last year, the Minister of State pointed out. The overheads reduction has furthermore contributed to a major extent to a fall in inflation to under 1 percent, which is once again beneficial for citizens, he added.
Compared to December last year, a family with two children living in a 50 square metre dwelling heated with gas pays, thanks to the 20 percent overhead cost reduction, HUF 11,872 less, on the average for overheads this December, János Fónagy mentioned as an example. A retired couple living in a dwelling of the same size with district heating saves HUF 8,273, “which is especially good for everyone, also considering the Christmas time”, he pointed out.
The Minister of State called attention to the fact that considerable advance had been made for working out an act on public utility services. The act planned to be finalised by spring is to create a single framework for the current acts on the sector. It will rule that services that are natural monopolies in Hungary (water, electricity, gas, district heating) and other important services of public interest should to a decisive part be owned by the state or local authorities. The companies will spend the profit generated on the operation, maintenance and development of the service.
The Government policy of overhead cost reduction is pioneering not only in Hungary but in all Europe. Partly considering the Hungarian success, overhead cost reduction is on the agenda in several EU countries and the relevant measures easing the burden on the population have already been introduced in some.
(Ministry of National Development Communications Department)
