Prime Minister Ferenc Gyurcsány told television viewers on Sunday to forget tax reforms even in the medium term, Privátbankár.hu reports. Gyurcsány reiterated his earlier argument that tax reforms can only be implemented if they are coupled with “drastic adjustments or austerity measures in public administration and welfare,” and the extra revenue they generate could then be used to cut taxes and revamp taxation.
Former coalition partners SZDSZ are endorsing a major social austerity package to fund tax cuts, but the Socialists believe that this is not feasible and that Hungary should instead reform health care, education and public administration without any belt-tightening measures, he said.
According to the Prime Minister, Fidesz represents the opposite approach, arguing for “no reforms and no austerity.” Gyurcsány said Hungary’s main opposition has built a “strong political and social majority that is against reforms.” His counter-argument was that cutbacks in social spending are a prerequisite to tax reforms. “There is no public or political support for tax reforms whatsoever,” he added.
Despite this, the Hungarian Democratic Forum (MDF) is proposing a third way to combat mass tax evasion involving a tax amnesty and simplified flat rates of taxation.
Gyurcsány did not rule out the possibility of an opposition-backed proposal to appoint non-party experts to replace Liberal Ministers in the new, minority government.
Accusing the Free Democrats of failing to practice what they preach, Gyurcsány brought up the City of Budapest’s appeal for Ft 18 billion (€72 million) to bail out cash-strapped public transport company BKV Zrt. He stressed that the government signed an agreement with the capital in 2003 to provide a Ft 37 billion subsidy to BKV, but that all further responsibility for its solvency then lay with the city’s Liberal government.
“Would you like to pay more taxes because Budapest isn’t doing its job?” he asked. “I could sign off the Ft 18 billion with a single stroke of my pen but I won’t because there must be consequences. Ft 18 billion is almost 0.1% of Hungarian GDP. That’s a lot of money.”
“Budapest can’t point fingers at the government. We delivered what we had promised and I will stick to the budget.”
When asked about the future of his political career, Gyurcsány said being in opposition was a natural part of politics in a democracy and he had no problem with that. He also said he would never return to the world of business.
“I strive to serve this country, in government or opposition, to help the Hungarian left as a member of the Socialist Party and as a party leader, whatever fate brings.”
The longer the country waits to tackle the tax regimen the more it’s going to cost. If current gov’t doesn’t have the backing of the people, then it’s time to get a gov’t in that does.
I still cannot see a true commitment from the top regarding austerity. MSzP concentrated on small ticket items; there is still 5 times more gov’t in HU than in other equivalent OECD nations (and Viking for references check out Bokros and Simor who made the same points before claiming this isn’t true)…
Rolrox, when did I claim that the Hungarian Public Admin is too small? If it is 2 or 5 times more than whatever you compare with is maybe interesting for someone, not for me though.
I still do not understand how you will get the Hungarians to unite behind ANY Govt which would advocate “reforms”.
Fidesz will have to introduce hard measures, when they come to power, but they will not speak about it before the elections. It will be a “surprise” after, like in 2006.
And when Fidesz get unpopular for doing “reforms”, who do we take in then?
Is that what we want – politicians who say one thing, but will implement another?
“Is that what we want – politicians who say one thing, but will implement another?”
That’s the only kind of politician and not only in Hungary.
Look up the promises of the Gyurcsany gang, and tell us what good have they done so far. Nothing.
They keep lying and stealing and getting away with it.
Let’s hope the next government will actually do something useful. A long overdue tax reform, less waste and corruption and more accountability would be a good start.
“That’s the only kind of politician and not only in Hungary”.
“Let’s hope the next government will actually do something useful”.
Hhmm, no politicians in the next Govt?
The next government will not be “good” but it can easily be “better” then the current one.