Coronavirus Update: More details of the five-point economy protection plan revealed
László Palkovics, Minister of Innovation and Technology, has announced the details of the government’s new five-point plan to protect the Hungarian economy during the coronavirus crisis.
During a press conference this morning, Minister Palkovics introduced the details of the five-point economy protection plan announced by Prime Minister Viktor Orbán yesterday.
The plan will bring about the restructuring of 18 to 20 percent of Hungary’s GDP in three cycles. The government deficit goal will also be increased to 2.7 percent from 1 percent.
The first program focuses on preserving jobs: the government will, among other measures, take over a portion of wage payments from firms that had to resort to shortened working hours due to the coronavirus epidemic. As a second step, the government will devote HUF 450 billion (EUR 1.23 billion) in investments for job creation.
The third step is to provide support for hard-hit economic sectors, such as tourism and hospitality. The economic package’s fourth measure makes HUF 2,000 billion worth of preferential, government-backed loans available to Hungarian companies.
The fifth initiative will be called the Family and Pensioner Protection Program, and the government will gradually reintroduce 13th month pensions.
“As part of the job protection measures, state support will be introduced for part-time workers during the inevitable downtime,” the minister said, adding that “the state will take over 70 percent of lost wages for three months." The minister added that the government wants employees not to stay at home, but to create added value for the company without losing their job.
In order to maintain research and development capacity, for those working in engineering and R&D, the government will provide a 40 percent wage supplement for three months.
The government will also introduce tax and administrative relief. “As previously agreed, the social contribution tax will be reduced by 2 percentage points from July 1; VAT refunds will be accelerated; and special deferred and installment payment options will be introduced to facilitate tax payment,” the minister added.
For the most vulnerable sectors affected by the coronavirus, the government will provide HUF 600 billion support. “The government will provide additional resources for priority areas of intervention in the next three years in the form of investment subsidies, tax reductions, infrastructure development, soft and guaranteed loans, and capital programs,” Palkovics said.
Support will be also provided to universities and private research institutes for health research, and a health innovation agency will be set up to coordinate it.
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