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Hungarian Prime Minister Hints At “Even More Increasing Pensions” In Radio Interview

Tamás Székely 2016.11.21.

Higher minimum wages, as planned by the Hungarian government, and higher inflation could create room for increasing pensions, too, Prime Minister Viktor Orbán said in an interview to be broadcast on Monday.

Viktor Orbán added, however, that the minimum wage hike was conditional on an agreement between the government and employers, according to a teaser for the interview broadcast on public television news channel M1. If the government’s talks are successful, pensions could be raised by 1.6% next year, rather than by 0.9% as earlier planned, Orbán said.

Last Friday Economy Minister Mihály Varga attended a meeting of the private sector and government permanent consultative forum. The Hungarian government proposed hiking the minimum wage of unskilled workers by a 15% next year and a further 8% in 2018, while the minimum wage for skilled jobs could grow by 25% next year and by 12% in 2018. To offset these measures payroll taxes could be cut by 4 percentage points in 2017 then by 2 percentage points in 2018.

Ferenc Dávid, the chief secretary of business association VOSZ said after the meeting they would rather see the cut in corporate tax rates “converted” into even lower payroll taxes. Dávid said if payroll taxes fall by 6 percentage points in 2017 they can support the proposed minimum wage raises targeted by the government. He said lowering the corporate tax is a good gesture for foreign investors but would substantially affect only 1,000-1,100 companies in Hungary out of around 500,000.

Economy Minister Mihály Varga said after the meetings that the proposal put forward by employer representatives was a bit excessive considering risks to budgetary balance in the coming years. So far no agreement has been reached and talks will continue next Tuesday, he added.

via hungarymatters.hu and MTI