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Prime Minister Viktor Orbán has decreed a 5% reduction in state company expenses this year, focusing primarily on personnel costs, Index reports.
The directive aims to promote responsible management of state assets, enhance efficiency in the use of central budget resources, and streamline the operations of state-owned companies. The announcement on Wednesday comes in response to the economic impacts of the Russian-Ukrainian war and its repercussions for Hungary.
Under the decree, 100% state-owned companies, whether directly or indirectly owned by the state, are required to achieve savings equivalent to 5% of their personnel expenses for four months, based on the previous year’s accounting statements.
While this measure is mandatory for most state-owned entities, exceptions may be made for companies specifically under government ownership. However, the overall savings target for companies within the relevant budget heading must still be met.
The regulation stipulates that if any company fails to meet the required savings this year, it will need to save double the remaining amount in the following year. This rule applies to companies established before the regulation’s enactment and fully owned by the state but excludes entities like the Hungarian National Bank, companies of the Office of the National Assembly, and major firms such as Volánbusz (the state bus service provider), MÁV (state railways), Magyar Posta (state postal services), and MVM (electricity service provider).
The Government Control Office will oversee and ensure compliance with these savings requirements.
Via Index; Featured Image: Pexels