10 March 2014, Lake Balaton

I am also very glad to be here. Welcome to all of you!

The not at all unusual state of affairs has arisen here for me that of all the people present I am the one who knows the least about what I will be speaking about here today, in view of the fact that you are all tourism professionals, while I myself am not. This would seem to be contradicted by the fact that I accepted this invitation, but I had two reasons for doing so. Firstly, because there are perhaps a few things that I have a better view of from my seat, and about which it would be worth speaking about with you here. Our host has already mentioned tourism management and financing. This is not just an issue for the tourism trade, but also for the people who organise and run the country, and secondly, I though that you would give me a few ideas and suggestions which, God willing, and if that is also what the electorate wants, we will be able to utilise for the good of Hungary during the upcoming years. So, without presenting a comprehensive assessment of tourism in Hungary, what I can definitely say is that the City of Siófok has made a good bargain with the current government. It has stuck quite a good deal with us. Looking at the numbers here, we have freed the City from 4.5 billion forints in debt and have sent 17.2 billion forints in the form of funding within the framework of 384 development projects. This is relatively rare in the history of Hungarian state management, and so I think that the City of Siófok, our host, has certainly been one of the many winners of the past four years.

Ladies and Gentlemen,

What I would also like to bring up here in support of our past four years is the fact that instead of a politics that was only able to add one forint from the budget to the monies generated in 2009, and which added that money to tourism tax revenues, we have succeeded in increasing that sum by 50 percent and the level of funding is now at one and a half forints. This means that we can now provide this much to add to every forint generated locally, and this also represents the assumption of a sizeable debt. As far as the sector's performance goes, I have been examining and trying to assess the figures for 2013, and what I see coincides with what we have seen here, that with regard to the number of visitors, with regard to the number of guest nights and with regard to turnover, i.e. in all three of these key factors, 2013 was a record year. Taking into account the fact that we are part of a region, meaning the European continent, which is otherwise experiencing a serious economic crisis, the excellent performance of the sector is more than noteworthy. And I would like to congratulate those present, and through them every professional who works in the tourism industry, because behind these figures lie their work and their performance. According to the figures, 8.8 million visitors spent a total of 22.8 million guest nights in Hungary in 2013, generating 166 billion forints [over 500 million euros] in hotel revenues. This is included in the figures for Hungary's 2013 economic growth. Tourism has contributed significantly to enabling Hungary's gross economic performance in 2013 to grow following a dip in 2012 an in enabling comprehensive growth in Hungary in 2013.


I have also taken a look at the figures for the City. According to the figures for the City, you have a pretty good leadership and Mayor here, because last year over 250 thousand visitors spent 670 thousand guest nights in the city. If the leaders of the city have anything to do with this, then congratulations to them. We cannot of course know for certain, but let us not disregard the possibility that the work of the city's local government also contributed to these excellent figures. This represents an increase of 7.2 percent compared to 2012. The number of domestic guests has also increased by 10 percent, and 70 percent of accommodation turnover was generated by Hungarian tourists. These figures are impressive in themselves, but this isn't why I have brought them with me, but because they reinforce our belief in the fact that there are things that Hungarian tourism does well, that Hungarian tourism management does well, and which the Government does well, in other words that it would seem that it is worthwhile continuing along this path. And at this point I would like to mention what our host also talked about briefly, and that is the issue of the SZÉP cards [Széchényi tourism and catering voucher scheme], because we have looked into whether the SZÉP card scheme has been effective or not. In our opinion, and we introduced the SZÉP cards in 2011, the system has come up to expectations. I have some figures with relation to this too, according to which 23 thousand employers give SZÉP cards to 920 thousand of their employees today. In the summer of 2013, meaning a period that is specifically of interest to your profession, 544 thousand people used their SZÉP cards. This indicates that this logic is a good logic. In total, it covers the summer holidays, vacations, leisure time and healthy activities of one million people. There is a debate with relation to this issue, which I would rather not go into in detail and which I certainly won't undertake to decide here today. It is often mentioned that we should reduce the level of VAT on tourism services, and in general, people ask how the tax system could and should help tourism. The SZÉP card is to all intents and purposes partial compensation for the high level of consumer tax. On the other hand, if we reduce VAT, then we must raise personal income tax, and that in turn will lead to a reduction in the ratio of spendable income, meaning that a clever, well thought out opinion must be developed within this field with regard to how personal income tax, value added tax and the SZÉP card system complement each other from the point of view of tourism. We are willing to negotiate these things; I would simply like to indicate that we must think along the lines of a system.

With relation to development projects, I can tell you that during the previous seven-year European Union financial period 1132 tourism-related projects in Hungary received funding and we distributed 290 billion forints via this system of tendering. This sounds great, of course, but nobody is interested in this anymore; what every wants to know is what the situation will be over the course of the next seven years. What I can tell you with regard to the upcoming seven years, in this period of great planning, when we don't yet have precise figures available and can only draw you a rough sketch on the canvas, is that we expect to have available around 250 to 300 billion forints in funding for tourism over the upcoming seven-year period. With relation to Siófok itself, the City launched fifteen tourism programmes during this same period. It received 2 billion 730 million forints in funding from which 5 billion 444 million forints in development programmes were realised in the City. I would like to agree with the opinion we heard a little earlier, that tourism contributes around 9.9% to the gross national product, and increasing this ratio by one percent is a realistic objective. This is a huge feat. It means that we would increase tourism's contribution to the gross national product by some 10 percent. And so if we can increase this ratio from 10% to 11% over the upcoming four years then that will be an excellent achievement, I think. And it is not worth setting ourselves objectives that are smaller than this, because this Government is not in the business of setting itself objectives that can be measured in tens of a percent, because that doesn't motivate us to a suitable extent.

I would like to say a few more words about the things that have been mentioned here and I would like to react to them, if I may, because I would also like to report in short about the meeting I had with the Mayor earlier today. I would first like to react to the issue of working time allocation. I would like to ask for more support from you with regard to this issue, because the regulation of working time is a subject of continuous debate in Hungary and we are forever hearing the voice that tells us how we can restrict working opportunities for employees. I don't want to offend you; this is a union-based, logical approach. But one often goes to places and encounters cases in which employees in fact want to work more but the currently valid labour regulations prevent them from working more. From this perspective, the regulations aren't protecting them but represent an obstacle to them. The issue of overtime regulations is one such point; how many hours of overtime may be clocked in one year. And I am sure there are many others, but all I would like to say is that the employee side, meaning not just the side of capital, which you represent, but the representatives of employees must also give voice to the fact that they would like to be able to work more, they would like to be able to work more flexibly and they would like to be able to earn more, but that there are regulations which prevent them from doing so. They are preventing employees from being able to earn more and are preventing employers from being able to employ people in a way that is legally accountable, and enforceable and white. I am a 100% partner to initiatives of this nature, but I would like to receive recommendations with regard to how things should be from the industry itself. And then would could perhaps even change the general rules and could perhaps even formulate special rules for the tourism industry so that you can abide by the law and so that people who want to work can go ahead and work. This isn't about employers wanting to exploit employees, we are not in the 19th century of Marxism, but in the 21st century, in which people want to work, want to work flexibly and want to work within a work system that adapts to their lifestyles; this is how they want to maintain their families, for which they should receive support rather than having obstacles placed before them. We are partners to such endeavours, but it is the industry itself that must tell us what kind of changes it would like to see. So much for the issue of working time allocation.

What else did the Mayor say? I will fill you in on some of these. First of all, he said that the City would like a casino, because he feels it would enhance tourism. We will look into the idea. The possible establishment of a casino in Siófok is not currently included in legislation; please give us your opinions on this and we are prepared to consider the idea at some time in the future. We have heard that it is a good thing that there are tender opportunities for small and medium-sized enterprises, but that you would also like larger tenders so that huge, monster hotels such as this one can be renovated and refurbished, and that in addition to the existing one or two large hotels the City has, there might also be one that is capable of operating on an even grander scale. If you support this idea, then we are prepared to consider publishing larger tenders for investment projects of a larger volume. We are in agreement with regard to the fact that this is a city that has fought to achieve a high regard in the minds of the Hungarian people. Despite this, it hardly has any significant historic public buildings left, apart from perhaps its churches. The city does, however, have in its possession the plans of the city's old town hall, and we agreed with the Mayor that we could reconstruct the old town hall, which was designed by Károly Kós; if we could agree on how the current building could be utilised by the District Authority then everyone would be a winner of such a reconstruction and exchange. We would have a place to put the state authority and the City would have a new-old, symbolic building that provides truly high prestige. We also spoke about the fact that it would be worth creating new sports capacities, because this could also contribute to extending the tourist season. We are also ready to help in this regard and the negotiations are ongoing. I would like to inform you of the fact that we have very recently come to a decision on the path of the Budapest-Balaton bicycle route. There is now no further obstacle to beginning preparations for the development project, and then it will become possible to access the whole Balaton cycling network from Budapest, thus connecting it to the national cycling route system. This work has begun; the exact route is now available.  

On to the issue of development projects. You will remember that over the past ten or so years County Councils always had trouble with the fact that instead of being able to employ people according to county needs, they were in fact running large institutions such as schools and hospitals that had been delegated to the counties. This took away all of their strength. Our Hungarian counties were in fact large, institution-maintaining counties. These, schools and hospitals, are not profitable businesses, and so the poor counties soon found themselves wallowing in debt. We could hardly save them back in 2010, when we began governing the country. However, we were unwilling to bail them out by assuming their debts while leaving the sources of those debts and of the accumulation of new debts there with them, and so we also assumed the management of schools and hospitals within the framework of a unified state system and took control of them. With this, we set the counties free and their chosen representatives, the County Councils, are now finally free to deal with what would otherwise have been their job all along, to decide what development projects need doing within the county and to be a partner, as an elected body, to be a democratic partner to a democratically elected Parliament. And they can tell us and fight for, or as they say they can lobby for, the realisation of certain things within their given county and then distribute the resources acquired fairly within the county. This system is now in place, because during the next seven-year EU financial period we will be providing a budget to each county, which will be controlled by the County Council, as development funding. We ask only one thing, that there be county development plans so that we can tell the country's voters that we are right to give 40 billion forints in development funding to Somogy County, which will be utilised in roughly these fields. We don't want to manage things, we don’t want to decide things; we simply wish to collect the information and expenses required in the interests of our accountability. Cities with county rights will not have access to these funds; they will receive their own funding of a similar order of magnitude which they will decide how to utilise. And in addition there will be a separate Balaton fund that we talked about a little earlier, and in addition to these monies we will also be earmarking separate funds during the upcoming period for Lake Balaton as the Lake Balaton development region. It is with regard to this, in this unpronounceable English term TDM (Tourism Destination Management), it is within this system that I ask that you be so kind as to tell us the most rational way of utilising a Lake Balaton development fund such as this.

And this is where I have finally reached the end of what I would like to say. There is a general problem, and this is not just true of tourism, but the problem is perhaps most obvious in your profession. It is the problem of working together, of cooperation and partnership. Because I listened to the presentation a little earlier and I agree that Hungarian public administration is perhaps not flexible enough, not receptive enough not understanding enough, and is perhaps not open enough to the problems raised by the industry and is attempting within an inflexible system to perform a task that can only be performed within a flexible system. I certainly understood this much from the presentation. But things are also far from being in order on the other side of the coin. I think that the state will be able to be flexible and the state will be able to try thinking using a different logic, but if it has no local partners organised according to this logic then we will be in trouble. And it seems to me that things are not perfect with regard to our willingness to cooperate, and I know the reason why. The reason is poverty. Because what I see in practically all areas is that since, as our host elegantly put it, there was no accumulation of capital during the past 40 years, meaning that the communists nationalised everything and took the opportunity and space away from individual initiatives, the result is that now, when an opportunity arises, nobody is prepared to believe that everyone can be a part of the joint enterprise. What everyone initially thinks is that whatever happens, not everyone will get a piece of the pie. And if there aren't enough pieces for everyone, then it is best to posture ourselves right at the beginning in a way that enables us to shut out the people we don't like. And then the pushing and shoving begins. The first reflex, when a resource, an opportunity or an idea appears, the first reflex of the Hungarians, for historically understandable reasons, is not to start thinking about who I can forge a partnership with to enable us to do things together, but to start thinking about how to position ourselves so that as few people as possible have access to the trough. This logic is derived from poverty, but a modern country cannot be built in this way. It is undoubtedly true that there will never be enough money for everyone to have unrestricted quantities of it, but what we can undertake is to establish a fair and honest system that enables every worthy idea or system to have a start. This would be possible. But this requires not only public administration to be more flexible, but also for the industry itself to organise itself accordingly and to believe that we can build things not just in opposition to each other, but also by working together. I think that Lake Balaton could serve as an excellent example, where the strongmen in charge of local tourism prove that they can get ahead by working together and supporting each other and that in the end everyone will be better off than if we observe the old Hungarian logic derived from having been beaten down by the misery of poverty and begin working against each other. This is my wish for the future of the tourism professionals working on the banks of Lake Balaton, and what we can contribute is that we will gladly be partners to such an association established according to a special, novel kind of logic within the Lake Balaton region, God willing, and if the voters of Hungary give us a continued mandate to do so.

Thank you for your kind attention.

(Prime Minister’s Office)