Voters deal blow to government in anti-austerity referendum landslide

Hungary’s governing Socialist-Liberal coalition was dealt a sharp blow yesterday with the passage by overwhelming margins of three referendum questions aimed at rolling back elements of the government’s reform program.

While earlier public opinion surveys had pointed to a passage of the measures, the overall turnout and margins of victory for the “yes” votes both exceeded expectations.

With 99.9% of ballots counted, the three measures – which sought to revoke fees for doctors’ visits, hospital stays, and college attendance – had passed with 82.4%, 84.0% and 82.2%, respectively, the national election office (OVI) reported.

Meanwhile, unlike a similar referendum in 2004, which was declared void due to a lack of turnout, more than 50% of registered voters turned out at the polls yesterday, guaranteeing that the balloting was declared valid.

“Austerity, money collection and multiple taxation are not reforms,” said Viktor Orbán, former prime minister and chairman of main opposition party Fidesz, which initiated the referendum 18 months ago. “Hungarians want a new direction.”

In addition, the results indicated that Fidesz had managed to draw to its corner a large number of voters normally more sympathetic to the Socialists. The approximately 3.2 million voters who turned out to support the “yes” campaigns was significantly higher than the 2.3 million votes the party received in the last general election, in which it suffered and unexpected upset.

In its campaign, Fidesz sought not only to rally those upset at paying directly for services previously free of such charges, but to highlight what they say was the government’s heavy-handed approach in adopting the reforms.

Orbán Threatens New Referendum
Following the successful referendum, Fidesz leader Orbán said this morning that unless the government repealed a law adopted last month reforming the country’s health insurance system, it too would be overturned in a similar national plebiscite. Such a vote, he said, would come in September, or just six months before the country’s next-scheduled general elections, which public opinion polls show Fidesz almost certain to win.

Ft 5 Billion Spent on Campaigns, Voting
Sunday’s vote capped off a campaign by the governing parties and their main opponent that saw them spend a combined total of under Ft 500 million (just over €2 million) for PR, while Parliament had earlier appropriated Ft 4.5 billion to administer the vote.

According to a report on napi.hu, the Socialists spent between Ft 150 million and Ft 200 million and the SZDSZ between Ft 50 million and Ft 80 million trying to convince voters of the benefits of the fees. For its part, Fidesz refused to provide precise figures on its expenditures relating to the referendum, with one official saying only that the party “spent less on the ‘yes’ votes than the government [spent in public money] on the ‘no’ votes.”

Government Down, Not Out
While the opposition was quick to paint the referendum results as a humiliation for the deeply unpopular coalition, the government just as quickly moved to defuse the situation, saying it would respect the will of the voters and withdraw the fees as soon as possible.

At the same time, the government dismissed the notion that the referendum was a vote of no confidence in itself or its drive to reform the country’s creaky social-services system, which had earlier led to speculation that the coalition would not survive the vote.

“If it was the intention of the opposition to topple the government than this referendum was a failure because it cannot, and will not, achieve that,” said Prime Minister Ferenc Gyurcsány. (For more on the medium-term political implications of the referendum, click here.)

Meanwhile, Gyurcsány was quick to point out that while the fees would be withdrawn, the government would not be making up the difference with new revenue for doctors, hospitals or universities.

Currently, public approval ratings for the prime minister and his government are at near-record lows, with Gyurcsány’s personal rating at just under 20%.

Parliament to Debate Bill Enacting Referendum
Earlier this morning, Gyurcsány proposed that Parliament hold discussions Tuesday on a bill required to implement the referendum, writes FigyelőNet. The bill abolishing medical and tuition fees, which would likely become effective next month, can be downloaded from Miniszterelnok.hu, the official site of the PM (in Hungarian).

In a letter sent to Speaker Katalin Szili, Gyurcsány said that normal Parliamentary rules would have to be disregarded in order to hold discussions in one session on both the general outlines and specifics in the bill. He also suggested that final voting be held on the bill on Monday, March 17.

Last week the government said it would abolish the fees on which Sunday’s referendum was held as soon as possible if the result so required, and also made a decision not to compensate doctors, hospitals and universities for the funds lost if the fees were abolished.

The official explanation for this decision is that the Constitutional Court’s review of the referendum questions found that the topics do not direct relate to the budget.

But it is widely believed that that the government’s decision not to re-allocate money to make up the shortfall stems from a desire to demonstrate to the population the need for additional financing for such services by the people who use them.

The two members of the governing coalition – the Socialist Party (MSZP) and the Free Democrats (SZDSZ) – had earlier debated when the fees should be abolished if the referendum was a success. The referendum questions specified January 1, 2009, but it was decided that it would not have been easy to explain to voters why they had to continue paying the fees until the end of the year.

Local Officials Take Action
Meanwhile, according to medical portal weborvos.hu, at least one Hungarian hospital has already stopped collecting the fees which are to be abolished as a result of yesterday’s referendum. Árpád Kallai, director of Hódmezővásárhely’s Erzsébet Hospital, said that he had made a decision not to collect any fees from patients from Monday, and this decision was approved by the local government which operates the hospital. Kallai told the portal that he was not worried about being fined for not following a regulation that is still in effect, adding that the immediate abolishing of the fees is legitimate because an even larger than average ratio of residents of the town voted “yes” in the referendum.

Finally, the mayor of Esztergom told Inforadio.hu that the local government will give the city’s family doctors an extra Ft 60,000 (€226) every month if the government does not make up for the money lost by the overturning of the doctors visit fees. Meggyes said that this will cost the local government an annual Ft 8 million, adding that while Esztergom has reserves that can be used for such compensation, 90% of other local governments in Hungary cannot afford to do the same.

[Editor's Note: The above story was initially posted at 08:30 CET and will be updated over the course of the day.]