State Secretary Péter Benő Banai said the draft budget the government submitted to parliament on Tuesday includes a HUF 670 billion (EUR 1.7bn) fund aimed at protecting Hungarians from gas and electricity price increases. Banai, a state secretary of the finance ministry, told Hír TV that in response to the war in neighboring Ukraine, defense spending will be raised to 2 percent of GDP in 2023, in compliance with Hungary’s NATO commitments.
According to the draft budget, family allowances will come to HUF 3,225 billion in 2023, HUF 450 billion higher than this year, he said. Banai said local governments will be facing utility price increases as the utility price caps will be scrapped for companies and municipalities in next year’s budget. At the same time, they will also see increased revenues to the tune of HUF 100 billion as the business tax cuts for SMEs will also be lifted, he said. While governments before 2010 imposed austerity measures directly on households, the Fidesz-Christian Democrat government is keeping wages, pensions and family allowances at current levels while burdening the sectors that have made “extra profits”, he said. Additional resources left with families and companies during the pandemic translated into hundreds of billions of extra profit for banks, and growing inflation and base rates further boosted the sector, he said. The government is now asking the sector to re-allocate some of that profit to cover public spending, he said. The draft budget was prepared in consideration of the effects of the war in Ukraine, he said. The government expects growth to be around 4 percent while high energy prices and interest rates continue to weigh on the economy, he said. The budget is creating a HUF 170 billion reserve for eventualities, he said.