Gulyás: Government working to boost economy and preserve jobs

The government has decided to expand the SZÉP cards voucher system, a widely used benefit for employees, to also apply to food purchases in supermarkets.

Gergely Gulyás, Head of the Prime Minister’s Office, said the Hungarian government is continuing to work to boost the economy and preserve jobs, partly because they are the foundation of the resources for next year’s budget.

Gulyás told a press briefing that the government has decided to expand the SZÉP cards voucher system, a widely used benefit for employees, to also apply to food purchases in supermarkets. From Aug. 1 until the end of the year, the government will allow SZÉP voucher card balances to be used for purchases of food in supermarkets without restrictions. It will also raise the annual threshold for employer SZÉP card top-ups with tax preferences from 450,000 forints (EUR 1,200) by a further 200,000 forints. Meanwhile, the government has decided to allow companies distributing pharmaceutical products to write off up to half of their 40% windfall profit tax with spending on investments or research and development from July 1, Gulyás said. The windfall tax for pharmaceutical manufacturers will be halved, and 50% of the remaining tax can be written off if spent on R+D. Support for such an innovative and competitive market will prop up Hungary’s economy as well as the companies in question, serving fiscal stability and R+D simultaneously, he said. 

Regarding the war, Gulyás said Hungary continued to call for a ceasefire and peace in Ukraine and would stand up for that position in all forums. The conflict has entered a new phase, with an increasing number of people dying in the battlefield, Gulyás said. Besides the national interest of Hungary, it is also in the international interest to restore peace as soon as possible, Gulyás said. “Only peace can end the bloodshed”, and Hungary must stick to demanding immediate ceasefire and peace talks, he added. If Hungary, a part of the European economy, could free itself “from the suffocating embrace of the effects of the war”, it would immediately result in a significant drop and “practically the end” of inflation, he said. World politics are showing “worrying” developments, he said. “We are at a point where two nuclear powers do not see the use of ammunition containing Uranium exaggerated,” he warned. “A dangerous escalation has started,” he said. Hungary has been much criticised for its “openly pro-peace stance” in the EU, Gulyás said. Many “would prefer to silence the Hungarian viewpoint,” he said. While the European political elite is united in its view on the conflict, “European societies are not”, he said. Hungary will continue to stand by its pro-peace views, which the government also sees as the morally correct one, he said.

Regarding the budget, Gulyás said sufficient resources will be allocated to ensure that Hungary can meet spending obligations made as a member to NATO for the first time since the country’s changeover to democracy, Gulyás said, noting that defence spending next year will make up 2% of the country’s GDP. Meanwhile, Gulyás said the European Union’s decision on mandatory resettlement quotas for asylum seekers was “unacceptable and dangerous”, and an “abuse of power” that Hungary must stand up against in all forums with every means at its disposal. Gulyás called the European Council’s negotiating position on the regulation of migration and asylum seekers, adopted on June 8, “an invitation for everyone striving to migrate to Europe”. “This regulation would be harmful to Hungary in multiple respects,” he said. While the position currently proposes the resettlement of 30,000 migrants, it also gives the European Commission the right to raise that number, Gulyás said. He added that the task of carrying out 28% of asylum procedures would put a “disproportionate and extremely heavy burden” on Hungary. He said the adoption of the position “broke an earlier promise”, a consensus reached recently by EU heads of state and government on addressing the resettlement quota issue at an EU Council meeting. Gulyás said a “trialogue” with the European Parliament joining would “probably not help the situation at all because there is no other institution in the world as pro-migration as the EP.” Gulyás said that once the related directive is adopted, not only the EU’s court but Hungary’s Constitutional Court may play a role in examining whether the EU was exercising powers not legally assigned to it.

Concerning Hungary’s access to European Union funding, Gulyás said “the ball is in Brussels’ court”. He said it was now up to the European Commission to make a “political decision” on whether or not to “take on the conflict with the European Parliament” and grant Hungary access to the monies it is entitled to. He said the issue was a political rather than a legal one. “It isn’t up to us: it depends on when [the EC] drums up the courage to face the European Parliament, where [opposition] Hungarian MEPs have riled up the majority,” he added. Gulyás said the EC had already certified Hungary’s completion of its final “milestone”, and the country will be able to send invoices to the European Union from early July, he said. “They’ll then have 90 days to decide whether or not to pay,” he said. “Hungarian left-wing MEPs who earn 6 million forints in their pocket, paid by Brussels, are doing everything in their power to prevent Hungary from receiving the funding it is entitled to, money that could pay for Hungarian teachers to receive a pay rise and Hungarian health care to gets additional funds.”