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Hungarian Families in Focus – Interview with Katalin Novák, Minister for Families

Miklós Verseghi-Nagy 2021.02.22.

Although the reproduction rate has increased to 1.56 since its low point in 2011, and nearly 3,600 more children were born by the end of November 2020 than in the same period of 2019, one cannot yet speak of a trend reversal in relation to the population decline in Hungary. The Orbán government has introduced a number of family support policies in recent years, therefore this raises the question of whether the financial subsidies are sufficient. “We do not need to shape attitudes; we simply need to facilitate a family-friendly approach,” says Hungary’s Minister for Family Affairs. We also asked Katalin Novák about how families can get out of the Coronavirus crisis. Interview.

2020 was promising from a demographic point of view, considering the number of births and the number of marriages. Although the reproduction rate has increased, one cannot yet speak of a trend reversal. If there isn’t a U-turn, then a natural decline in population will continue in the future. What phenomena do you see behind this trend?

This negative demographic trend is not unique to Hungary. In the developed western world, including all of Europe, there are not enough children being born for the long-term sustainability of the population, let alone for its growth. This is a simple formula: to maintain current population levels, every couple would need to give birth to and raise at least two children.

The population of Hungary has been declining since 1981, for four decades. In terms of magnitude, 30,000 fewer babies are born each year than the number of people who pass away. This means that we are clearly not in a good situation, but as I said, as Hungarians we are not alone in this issue. The question is whether we settle into this or not. Do we accept that the world has changed, that families were larger in the past, young people took on many more children, while today there are small families, childlessness is common, and people are having fewer children later in life?

We in the government believe that we must not resign to this and must instead do whatever we can to stop our population from declining. We need to help young people by removing the financial barriers of having children.

The government’s measures of the past ten years have evidently moved demographics in the right direction. The number of childbirths, abortions, the infant mortality rate, marriages, and divorces have all moved in a favorable direction. This also proves that we have made the right decision when we made family-centered governance a priority and are now on the right path. Families are enjoying government support, and we are helping our youth by giving them the opportunity to start a family whenever they want.

Within the European Union, France is the closest to stopping natural population decline, yet even there they have not been successful in achieving a trend shift. With a reproduction rate of 1.55, Hungary represents the average EU reproduction rate. We can thus announce, that there is no country in Europe which would know what the right “recipe” is. Where then, should we look for such a sustainable societal model?

In the past years, Europe’s population has only been growing due to significant immigration. The birthrate in every country is below the level that would guarantee growth or even the maintenance of population levels.

There is no complete, replicable model. The desire to have children is rather decreasing than growing in the so-called developed countries of the West.

Take France for example, where people used to be more keen on having children – partially because of migrant families, partially because of great family-oriented politics at the time, but now even there this is no longer true. In my opinion, there is no adequate model, but we have a responsibility to bear together. The government, decision-makers, politicians, the media, those forming the public opinion can all do more on a European and even a global level so that we pay more attention to the further diminishing of the already feeble desire to have children that receives and has received much too little attention in recent decades.

Photo by Máté Bach

There is plenty of discussion around population booms and overpopulation, and many people tend to present it as the problems of Africa and Asia. However, there seems to be no capacity to look at the different parts of the world, where demographic problems are just the opposite. I once had a discussion with the Indian Minister of Family Affairs in New York, and I said that here in Hungary we are facing serious demographical problems, to which the Minister responded that they are as well. When I said that not enough children are born, the Minister laughed and asked what they could do to help, since they are facing the exact opposite problem.

Demographic problems at the level of the nation and community are the results of individual decisions. For this reason, the subject is extremely sensitive, and decision-makers rarely wish to formulate firm positions around it. It requires great skill to find a mode or measure of aid which does not interfere with or intrude upon individual decisions.

The government cannot, after all, intrude on any young couple’s private life. Everyone makes their own decision regarding with whom they live, whether they want children, and if so, when, and how many. At the same time, if young individuals have found their partner and wish to have children, then the government’s job is to provide ample support – as much as circumstances permit. Once the child has been born, it is again our duty to help parents raise the child responsibly.

In the past 10 years the Hungarian government has placed this question so precisely in the center that Hungarians are increasingly realizing that in Hungary it is worth establishing a family and having children.

Thanks to our multilayered and effective support system we have reached the point today, where young Hungarians are making such decisions more easily, and are less likely to decide not to have children. It is also thanks to this, that in the past 10 years the willingness to have children has increased by 20%, more than anywhere else in the European Union. We are striving to take the lead by further developing an effective family support system and an approach unique to Hungarians.

Photo by Máté Bach

Of course, it is not only the government which can act in the interest of this issue. A lot depends on, for example, whether employers are willing to accept an employee who could be on parental leave for three years. In Hungary it is typically the case. Many people can afford – not necessarily in financial terms, but it is a completely different matter — to devote three years of their life solely to the raising of a child without at least the risk of losing their job. If, however, the mother wishes to return to her workplace sooner, then there needs to be an available daycare facility, with free dining, which we also provide for families.

This is not the case in many places around the world. We lived with three children in Germany and I remember exactly how difficult it was, although the quality of life was good, to find a spot at a nursery, or at a kindergarten, and on top of that this public service costs a fortune. Those who have experienced different systems of family support are the ones who can truly value the system Hungary has in place. Many forget that this was not always the case. Between 2002 and 2010 for example, the left-wing government was completely anti-family, and had even dissolved what had previously been in place.

Minister, you mentioned the Indian and German examples. No matter how rich a country is, or how good their living conditions are, it seems the willingness to have children is inversely proportional to the quality of life. This leads to the question of whether financial incentives suffice. Will we not fall into the mistake of failing to target the root of the cause? How can society develop an effective approach? What kind of non-material solutions may provide aid to families?

Here, we do not need to shape attitudes; we simply need to facilitate a family-friendly approach. I would not underestimate the role of financing either. In 2010, the government spent 960 billion forints (EUR 2.6 billion) on family support, in 2021, it spent 2.5 times this number, 2600 billion forints (EUR 7.25 billion).

If a couple is thinking about starting a family and they are about to decide whether or not they want to have children, it does make a difference if they can expect to have assistance towards having a family home, providing the child or children their own rooms, and not having to pay for textbooks out of their own pocket.

I could go on and on, we have free meals and Elizabeth camps for children in need, family tax credit, plus the 10-million-forint (EUR 28 000) baby expecting subsidy introduced in 2019. These all serve the goal of boosting the confidence of youth if they wish to have children.

As far as non-material aspects are considered, it is a widespread phenomenon now in the western world that people primarily prefer personal wellbeing, and have difficulty accepting the hardships and sacrifices of having children. Furthermore, women who invested years, money and energy in studying, understandably want to put their knowledge to use on the labor market and build their careers. Compared to this, taking on the responsibility of children can seem to many as a downgrade or a step back. Among other things, this is where the role of the community comes into play: how it encourages its youth to make decisions about starting their families as soon as possible, or, the other way round, it encourages them to keep postponing the decision?

'Successful Family and Economic Policies Go Hand in Hand' - Family Affairs Minister Novák at the Hungary at First ‘Site’ Conference
'Successful Family and Economic Policies Go Hand in Hand' - Family Affairs Minister Novák at the Hungary at First ‘Site’ Conference

Although the challenge of stopping demographic decline sometimes seems “almost impossible,” Hungary decided to move forward with its policies to help families have as many children as they want, Katalin Novák, the minister for family affairs said on Tuesday at the international “Hungary at First ‘Site‘” press conference organized by the Friends of Hungary Foundation, […]Continue reading

Regarding the latter, the risk is that, due to the postponement of their decision, young people, who will not be so young by the time they do make a decision, will have run out of time. We see that in Hungary as, for example, one out of five couples suffer from infertility problems. In many cases they cannot have children naturally or at all. And if a couple makes their first decision too late, say around the age of forty, then ten years later, even if they would like to have one or two more children, for biological reasons they will no longer be able to. We must face the fact that, although scientific development has lengthened the average lifespan, and the number of years lived in good health is increasing, the age limit of conceiving cannot be extended. Today our optimal age of conceiving is the same as that of our ancestors 100 years ago, we have not changed in this aspect.

Prime Minister Viktor Orbán named you Minister for Families on 1st October. This decision, if I understand correctly, reflects the government’s intentions you have mentioned before. As minister, what were the first decisions you put into effect? How can the government pay even more attention to families and provide more aid?

Following my appointment, I almost immediately presented the Government the family home construction scheme, which came into effect on 1 January, and surpasses all other options which have existed to this point.

In terms of non-material measures, I would highlight addressing and involving young people in saying what they wish with regard to starting families and having children. We keep the subject on the agenda so that those whom it affects may discuss it in their own environment. I am convinced that “fashion” plays a role here, it is weird to say it out loud, but this is the way it is. We should remember how many trends there were in the past few decades and think for example about the hippie movement.

Likewise, if it becomes fashionable to “live your life” as long as you can, make the most of your 20s and 30s, travel the world, care only about yourself, your body, your spirit, then this fashion will have a strong impact on youth. But if they see in their environment how well a family can function, that you can live your life also with a baby, that raising children is not just a duty, but a joy as well, then it will similarly have a strong impact on them.

There is an interesting observation that if, for example, large families move to a certain area, the number of childbirths increases in that area, as people realize how great it is, how good this life can be. A family of 5-6 children will in this way cease to be a distant, never-heard-of phenomenon.

This acceptance does not only revolve around children and families, as those who choose not to have children should not become stigmatized. It is a natural occurrence that people wish but prove unable to have children.. In cases like that, it is important to support the people who for biological reasons cannot have children and help them achieve it either through adoption or medical assistance. We have greatly extended these forms of government support, for example, we made it easier to access infertility treatment, and we made the required medicine free-of-charge.

The coronavirus pandemic was an unwanted determinant last year. In addition to the obvious suffering and fallbacks, what can we learn from the pandemic, how can families recover from this crisis in 2021?

The coronavirus pandemic paradoxically helps families, since many employers have realized that loyal, good workforce can work excellently from home. This is no factor to be afraid of, as many people used to believe. With these experiences we can achieve the long-term goals related to reconciling workplace and family duties.

The subject of cohabitation in a closed space has received a lot of media attention internationally and online. There are those who tried to present the family as an outdated model, claiming the pandemic has proven how anachronistic it is, and that various generations simply cannot coexist. I believe the opposite.

The coronavirus pandemic has shed light on how important a family is.

People show concern towards their elderly family members, parents, and grandparents. Children learn that they have a responsibility towards taking care of the elderly, and the elderly learn to value how great it is to have someone who spends time with them. Everyone withdraws a little into their own shell, but this shell is not so small that only the immediate family can fit into it, at least on the level of care it reaches the extended family. I believe that it is during these times that many people come to appreciate the value of family and the support which one can count on from loved ones. It is during these times that we discover that the most important part of our lives is indeed our family.

Are you worried that the negative economic consequences of the pandemic situation will impact families so badly that trust in the family support system will decline?

The support which the Hungarian government provides to Hungarian families is unique. During crises, particularly financial instability, governments usually introduce austerity measures or increase taxes. The pandemic is understandably weakening families’ sense of security. This is exactly why we have decided that instead of removing any element of our current family support measures, we will strive to provide further support. This is why we have announced the largest housing program of all time, and decided on reintroducing 13th-month pension payments. Furthermore, in the future we provide mothers with more money in the first 6 months after delivery than the amount they earned before.

Family is the best investment during both the time of peace and the time of crisis, and I hope families feel that they can count on the government.

What are the exact measures coming into effect in terms of family aid starting January 1, 2021?

The largest-ever home construction program was launched on 1 January. We reduced the rate of value-added tax on new homes from 27% to 5%. In the case of families which are expecting or raising children the government completely waives value-added tax if they request government support for the purchase of their new home. Families which build a house for themselves can reclaim the 27% VAT after their building and building plot expenses, up to a maximum amount of 5 million forints (EUR 14 000). Furthermore, those families which buy new or pre-owned residential properties with CSOK are fully exempt from paying the 4% real estate acquisition tax, regardless of the purchase price of the property. As a result, a family can save 2 million forints (EUR 5 500) after purchasing a 50-million-forint property (EUR 140 000). Within the home construction program, we took every possible family set-up and circumstance into consideration. Accordingly, we would also like to offer opportunities for families whose members wish to live under the same roof, mutually supporting each other, but in separate apartments. This is what multi-generation home construction is all about. We now see that among new measures home refurbishment has attracted most attention. Of course, this is not surprising since the program offers support for renovation without the need to move to a new location, for families working on the redecoration and modernization of their home. This means a non-refundable 3-million-forint (EUR 8 400) sum, from which half of the cost of the renovation can be financed. This amount can be claimed even after a single child up to the age of 25 years or without age limit in the case of a disabled child or a child entitled to child homecare fee.. Single parents and mosaic families can also avail of this opportunity. Furthermore, those who cannot afford to pre-finance the renovation costs can apply for a preferential home renovation loan with an interest rate of up to 3%, for a maximum of 6 million forints (EUR 16 800), with a 10-year maturity and a 3% interest payment at any bank. In addition, notary fees payable for subsidized home loan applications will be significantly reduced, lowering the cost of house acquisition even more for families with children.

photo by Máté Bach

This year the already increasing child homecare fee will be increased even more. From 1 July, the infant care benefit will see an increase from the current 70% to 100% of one’s gross salary. Thanks to this, the income of mothers who are covered by state social insurance will not decrease during maternal leave; in fact, during the first six months they will receive an even greater amount than their net salary was.

We would like to honour the elderly as well, and for this reason we will be increasing pensions, and will gradually start to restore the payment of 13th-month pension.

I am convinced that not even the coronavirus pandemic will be able to halt the current, encouraging developments, and Hungary’s population will once again thrive and the average age of citizen’s decrease within a few decades.

Featured photo by Máté Bach