In 2010, we inherited the problem of high unemployment, but we have been committed to correcting the sins of the Gyurcsány-Bajnai governments. In 2013, the government launched an extensive and groundbreaking job protection action plan, with the aim of improving the situation of disadvantaged employees and enterprises. The package of measures included cutting taxes and contributions for certain prioritized groups – the elderly, the young and unskilled workers, as well as mothers returning to the job market and those who have long been unemployed. We offered new, simpler and more favorable tax conditions for businesses and also helped them with financing and administration.
The measures brought results: Since 2013, we have seen a steadily improving trend in terms of employment, which has not even been broken by the coronavirus pandemic. Already at the forefront of the EU for a while now, we currently rank 6th for lowest unemployment, according to Eurostat.
Prior to 2010, we had seen that aid and debt policies are doomed to failure. This is why we stuck to our workfare model even during the pandemic. That is not to say that the government does not help in difficult times, but it has done so not by handing out aid but through protecting the economy, tax cuts, the extended moratorium on loan repayments, grants to boost investments, and the job protection scheme. When closures due to the epidemic were threatening the economy, the government decided to take over a portion of wage payments from firms that had to resort to shortened working hours. Furthermore, we have been aiding investments to boost job creation, thanks to which, Hungary broke two investment records last year, while the global economy saw a decline in developments.
In 2021, signed FDI agreements totaled an unprecedented EUR 5.3 billion, and we also saw the launch of Hungary’s biggest ever greenfield investment with South Korean SK innovation’s battery plant. While the world economy has been hit hard by the pandemic, Hungary’s investment rate ranks 2nd in the EU.
Our economic protection scheme also entailed providing support for the most vulnerable economic sectors during the pandemic, such as tourism and hospitality, and we also made government-backed loans available to Hungarian companies.
PM Orbán has stressed on many occasions that, unlike leftist governments that made it easier to live off of benefits, we believe that only positive economic performance will deliver tax rebates or wage increases.
Our vision has become reality: Hungary’s economic situation, namely, the highest GDP growth in the past 30 years, has allowed nearly 2 million parents to get back their income taxes paid in 2021, pensioners to receive a one-month premium, and under-25s to be exempt from PIT altogether. The minimum wage now exceeds the level of the average wage during the Gyurcsány-Bajnai governments; what is more, a wage increase is within sight for many professions, including nurses, nursery school employees and employees of cultural institutions.
If that’s not enough, according to Eurostat data, Hungary also boasts the largest tax cuts on wages over the last decade.
Our goal remains to keep Hungary at the top of the EU growth table, to achieve full employment and a crisis-resilient economy that allows the surplus to stay with the people – and we are on track to making these all a reality.