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28th June, 2018

House begins debate on 2019 budget



The 2019 budget is a robust budget and provides more to families despite its firm deficit targets, Finance Minister Mihaly Varga said as he opened debate on the 2019 budget bill in Parliament on Wednesday.

He promised that more will be allocated for families, supporting the birth of children, to creating jobs and keeping employees, maintaining the value of pensions, developing the economy and protecting the borders.

Economic growth, which has been above the EU average since 2013, provides the funds for these measures, he said.

The budget deficit target is 1.8% of GDP and the budget calculation was based on 4.1% GDP growth and 2.7% inflation.

In reply, Jobbik keynote speaker Janos Volner called the 2019 budget one of unsustainable economic and social trends that does not provide a real answer to the challenges posed by the Hungarian economy and society, but only addresses the symptoms of several important structural problems.

He maintained that this budget will not change the fact that Hungary is economically dependent on EU funds, foreign investment and remittances of funds from Hungarians working abroad.

Socialist caucus leader Bertalan Toth said the cabinet is building and living in a virtual reality as the bill is “stuck in the past,” supports those with higher incomes, and sets aside fewer funds, as a percentage of GDP, for education and health care than this year’s budget. At the same time, he said, the budget increases by half the funds for “government propaganda”.

LMP’s Antal Csardi also objected that less money will be spent on education, and criticised the transformation of the funding for the Academy of Sciences as an attack similar to the attack on the CEU.

Democratic Coalition keynote speaker Laszlo Varju said the 2019 budget will mean a loss of opportunities for families and businesses. He argued that the cabinet should withdraw the bill and recalculate the budget based on a 3.1% inflation rate, in accordance with the latest MNB forecast and taking into account the recent devaluation of the forint.

Debate on the budget will continue on Thursday and Friday. (magyarhirlap.hu; infostart.hu; magyaridok.hu; nepszava.hu; 168ora.hu; hirtv.hu)
28th June, 2018

Novak promises Ft 2trn for families



An unprecedented amount of funds will be available in next year’s budget for supporting families, Human Resources Ministry state secretary for family and youth affairs Katalin Novak told a Wednesday press briefing.

She said Ft 2 trillion will be available for supporting families, with Ft 355 billion available to cover tax breaks for families, and another Ft 242 billion envisaged for housing. (echotv.hu; magyaridok.hu; orientpr.hu)
28th June, 2018

Ban on homelessness outlined



The cabinet is packaging the ban on homelessness in an amendment to the act on misdemeanours.

Under the proposed amendment, the current ban on habitually living outdoors in World Heritage sites or public areas designated by local councils will be replaced by bans on staying on practically any public area.

The practice of regularly sleeping in public areas despite calls from authorities to desist shall be classified as a misdemeanour.

Under tougher penalties included in the bill, fines may be meted out to offenders. Those caught three times within six months may be jailed.

The bill orders local councils to repeal by October 15 their decrees in which they designate the places where “habitually staying in public areas” is banned. (index.hu; napi.hu; hvg.hu; propeller.hu)
28th June, 2018

Law on elections to change



The law on elections will change to limit the payment of state subsidies to small parties, under a bill submitted by Fidesz MPs Gergely Gulyas, Istvan Bajkai, Pal Barna Zsigmond, Mate Kocsis and Szilard Nemeth.

According to the motion, a party fielding a list for the elections may only obtain subsidies if the leading officials of the party and its list candidates, as well as individual constituency candidates, provide safeguards for repaying the funds.

No state funds will be paid to candidates who have not honoured earlier obligations to repay funds, or who were the candidate of a party which did not honour such an obligation.

Parties will be excluded from funding if they failed to meet a repayment obligation, or if their leading official was the leading official of a party which did not repay funds.

Several “bogus parties” and hundreds of millions of forints disappeared after the parliamentary elections, website 24 recalls. (24.hu; hvg.hu; 444.hu)
28th June, 2018

Pensioners lobby for higher pensions



Pensioners’ lobby group the Pensioners’ Parliament is asking opposition parties to file modifications to the 2019 budget bill, to raise pensions next year.

Their main objective is to have pensions indexed not only to inflation but also to real wages.

Real wages went up by 37.7% from 2011 to 2017, but the real value of pensions increased by only 10%, said the lobby group’s president Mihaly Karacsony.

In addition, real wages went up by a further 10.3% in the first quarter, he said.

The average net wage was Ft 210,300 a month in January-March, while the average pension was Ft 128,000. The minimum pension of Ft 28,500 has been unchanged since 2009.

The government dissolved the pension fund supervisory board on May 18, thereby obtaining full discretion over the fund, and giving it the power to redirect money from the fund to other budget areas, according to Karacsony. (nepszava.hu; napi.hu)
28th June, 2018

Gulyas to oversee university



Administration of the National Public Service University will be assigned to Prime Minister’s Office leader Gergely Gulyas alone under a proposal submitted to Parliament on Wednesday.

At present, the ministers overseeing public administration, justice, defence and law enforcement oversee the university. Under the new proposal submitted by Gulyas himself and Monika Dunai, unequivocal responsibility will be transferred to the PMO.

The bill also stipulates the establishment of an advisory body operating under the leadership of the PMO with the participation of the justice, defence, foreign and law enforcement ministers.

If passed, the bill will enter into force on August 15. (infostart.hu; magyarhirlap.hu; mnarancs.hu; nepszava.hu; privatbankar.hu)
28th June, 2018

Ban on new hires in state administration



The government has banned any new hires in several areas in state administration, effective June 20, according to a government decree, Nepszava reports.

Ministers are to report the number of their staff and vacancies as at June 19 to Prime Minister’s Office state secretary Marcell Biro.

The state administration union MKKKDSZ said the ban makes no sense, as vacancies amount to 10% of existing jobs.

If retirements erode the workforce further then the proper operation of state administration would be undermined, the union warned. (nepszava.hu; hvg.hu; index.hu)
28th June, 2018

Greenpeace aims for plastic bag ban



Greenpeace ha collected 50,000 signatures in 20 days in its campaign for a ban on single-use plastic bags, the environmental protection NGO announced on Wednesday.

Inspections have found plastic micro-particles in the Danube and Tisza rivers, Greenpeace underlined.

Signatories would like Hungary to ban plastic bags by 2020.

Romania decided a few months ago to ban these plastic bags from January 1, 2019. India will impose a ban from 2022. (index.hu; hvg.hu)
28th June, 2018

Forint sinks to new record low



The forint traded at more than 328 per euro on Wednesday afternoon, reaching its weakest level to date.

Analysts are revising their forint forecasts, as fewer and fewer of them believe that the currency will start strengthening before it sinks to 330 per euro, Portfolio reports.

The forint has lost 2.3% of its value against the euro over the last week and more than 5% since the beginning of the year. Meanwhile, the Polish zloty dropped by only 2.3% this year and the Czech crown has strengthened by 2%.

The forint’s previous record low against the euro of 327.6 was reached in January 2015. (portfolio.hu; napi.hu; hvg.hu; 444.hu; nepszava.hu)
28th June, 2018

Fewer registered unemployed in May



The unemployment rate was 5.3% in May, as the number of registered unemployed stood at 244,200 at the end of the month, down 15.1% from a year earlier, the state employment service NFSZ announced.

Data shows that 3.6% of the working-age population were out of work.

Some 33,500 people registered as new job seekers last month, down by 14.3% from one year earlier.

Among the unemployed, 69,800 people, or 28.6%, had been seeking a job for more than a year.

Among the registered unemployed 45.3% did not receive any benefits.

In May, 32,200 job vacancies were registered, of which 46.7% were subsidised by the state. The number of vacancies was 110,700 in May. (portfolio.hu; napi.hu)
28th June, 2018

IMF sceptical of 2019 deficit target



The 2019 budget deficit target set by the government of 1.8% of GDP is not realistic, as the shortfall will reach 2%, the IMF announced on Wednesday after its delegation completed its regular annual visit to Hungary.

In order to reduce the risk of a higher budget deficit, the IMF recommends growth-incentive measures, such as phasing out the remaining crisis taxes, expanding the scope of genuine taxpayers, simplifying tax administration and increasing budget revenues.

The IMF repeatedly underlined the importance of introducing a general property tax.

The IMF proposed aid targeted to the poor in preference to fixing utility prices.

The report argues for simplified construction approvals, the easier connection of small-scale electricity producers to the national grid and action against corruption.

GDP growth will reach 4% this year but may decline afterwards as Hungary will receive fewer EU funds from 2020, the IMF warns, adding that the pace of growth can be maintained only if structural reforms are completed.

The IMF will release its detailed report on Hungary in the coming weeks after its board approves it. (portfolio.hu; magyarhirlap.hu; magyaridok.hu; napi.hu; hvg.hu; nepszava.hu)
28th June, 2018

Haulers ask MEPs to reject new posted labour directive



Haulers association NiT Hungary has asked Hungarian MEPs to reject the new EU directive on posted labour, it was announced on Wednesday.

The new directive will expand the scope of the posted labour law to include transport company drivers, who would not be allowed to work for lower Hungarian wages when they drive in Western Europe.

The directive orders that they be paid the same wages as paid to drivers in the host countries.

Not only Hungarian but all Eastern European hauling companies will be negatively affected if the new directive is passed, NiT highlighted.

The European Parliament will vote on the issue during the summer or the autumn. (napi.hu; portfolio.hu; magyarhirlap.hu)
28th June, 2018

Hungary lags in PPP wage comparison



Hungary lags behind its peer countries in terms of purchasing power parity (PPP), the OECD found in a recent study.

The average PPP wage in Hungary was $22,576 in 2017, up from $20,825 a year earlier. The 2017 figure was the second lowest among OECD countries, ahead of only Mexico with $15,314.

On the other hand, Hungary performed well in wage increase, producing the second highest advance of 8.4% after the leading 10.1% in Iceland. (mfor.hu; napi.hu; nepszava.hu)
28th June, 2018

New VAT reporting rules next week



From July 1, all businesses issuing an invoice with VAT reaching Ft 100,000 must report the transaction to the tax authority NAV, Napi reports.

Zsuzsanna Verebelyi, head of tax consultancy Adonavigator, said these transactions will have to be reported within five calendar days, not working days.

If the VAT content reaches Ft 500,000, then the deadline is only one day.

The fine for failing to report transactions on time may reach Ft 500,000, Verebelyi strongly warned. (napi.hu)
28th June, 2018

Auto suppliers opting for robots as labour shortage weighs on growth



The majority of car industry suppliers believe that robotics will be a key factor in the next five years, as 60% agree with that view, consultancy PwC announced on Wednesday.

PwC’s recent survey of the automotive industry found that setting up a research and development centre is a valid option for 13% of the suppliers.

Among respondents, 78% consider the lack of a proper labour supply to be the chief hindrance to their growth. One-third said they have had to refuse orders due to the lack of labour.

In response to the labour shortage, 80% of companies increased their wages and 64% launched training programmes.

Nearly 50% of the respondent companies said they employ foreigners in the tense labour market. (napi.hu; magyarhirlap.hu)
28th June, 2018

Nebih withdraws more Jana drinks



The food safety authority Nebih has ordered distributor Fonyodi Asvanyviz to withdraw from store shelves five Jana brand mineral water products, having ordered the recall of two Jana products last week.

No more blueberry-cranberry, grape-mirabella, apple-lychee, lemon-lime or forest fruit flavoured drinks produced by the Croatian company with the expiry dates of February 22-24, 2019 can be sold.

Jana’s strawberry and guava-flavoured mineral waters were recalled last week at the behest of Nebih.

Customer complaints to Nebih about smelly and opaque Jana drinks led to the investigation. (napi.hu)
28th June, 2018

US authorities separate Hungarian toddler from parents



A two-year-old Hungarian boy has been separated from his parents by US border police after the family tried to enter the US illegally from Canada.

The Foreign Ministry has reportedly contacted the shelter in New York where the boy has been held for weeks.

Reports say he has been unable to communicate with anyone as no-one in the reception shelter speaks Hungarian.

His parents, Regina Zsigmond and Laszlo Kovacs, have fallen victim to new US regulations according to which illegal immigrants are immediately detained, and children who are detained beyond 20 days are placed at various reception stations.

While the boy is in New York, Kovacs is being held at a federal detention facility in Buffalo. Zsigmond was to be taken to North Carolina to face charges of undergoing a sham marriage in 2014 in order to gain US citizenship.

The child’s 23-year-old sister is ready to take the boy but procedures are moving slowly.

She told the tabloid Blikk that she has provided all documents requested by American authorities but has not received any information about the boy’s situation.

US authorities require copies of her fingerprints, which may take a month to process, according to the Times-Union newspaper.

The Foreign Ministry said it has contacted the shelter where the boy is held and is looking at ways to bring him home. (hvg.hu; timesunion.com; blikk.hu; nepszava.hu; ma.hu)
28th June, 2018

Driver jailed over fatal crash



An unspecified court on Wednesday handed down a 7.5-year jail term to the man who, according to the indictment, caused a fatal accident while driving under the influence on Szentendrei ut on March 18, 2017.

Instead of the permitted 70 kilometre per hour speed, the man was driving at 165-170 kilometres per hour when he slammed into a car waiting at a red light, killing two of its occupants instantly.

One of them was 21-year-old world junior kayak champion Richard Janza.

The court also banned the culprit from public affairs for five years and gave him a lifetime ban on driving. (index.hu; hvg.hu; 168ora.hu; ma.hu; hirtv.hu)
28th June, 2018

Store robber sentenced to eight years



Pecs Court on Wednesday sentenced a 33-year-old man to three years in penitentiary after convicting him of robbing tobacco shops in Pecs last summer, stealing Ft 530,000 in total.

The man was found guilty of four counts of robbery and preparations for robbery. He was also ordered to pay nearly Ft 8 million in court costs. (origo.hu; hirado.hu; hvg.hu; magyaridok.hu)
28th June, 2018

Babos top seeded in doubles at Wimbledon



Hungarian-French duo Timea Babos and Kristina Mladenovic have been made the top seeds in the women’s doubles tournament in the Wimbledon tennis championships, due to start next Monday.

Babos and Mladenovic won the Australian Open title earlier this year and won a tournament in Birmingham, England on the weekend.

They were runners-up at Wimbledon in 2016. (nepszava.hu; sport365.hu; origo.hu; zoom.hu)


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