Good afternoon. Thank you very much.
Mr. Speaker, Honourable Parliament, Honourable Members,
In keeping with our parliamentary customs, I will report to you on the events that have taken place since the last sitting of the National Assembly. Two months have passed since our last meeting. In these two months, the Russo-Ukrainian war has continued. New sanctions have been announced in Brussels, and it has become clear that energy prices will not return to their pre-war levels; even after Europe’s gas storage facilities were filled, gas prices remained at three times their pre-war level. The Brussels sanctions and high energy prices have led to inflation. I can inform you that the final annual account, the final financial account, shows that in 2022 Hungary spent 4,000 billion forints more on energy than it did in 2021. This money was taken out of Hungarians’ pockets by Brussels through sanctions. In these two months, the national consultation on Brussels sanctions was concluded. The 97 per cent “no” result is a clear declaration that Hungarians do not agree with Brussels’ sanctions policy. In these two months, Honourable Members, we have also seen the performance data for the Hungarian economy over last year. In 2022 the economy grew by 4.6 per cent, there were more jobs than ever before, our export performance exceeded all previous records, and last year saw the highest amount of capital brought into Hungary for more than twenty years. In the year 2022, both the budget deficit and government debt were reduced: the deficit from 7.1 per cent in 2021 to 4.9 per cent, and government debt from 77 per cent in 2021 to 73.5 per cent. I would like to stress that these reductions in the deficit and government debt took place in an election year. The experts and leaders at the Finance Ministry and the National Bank deserve recognition for this.
In February 2023 we were able to provide a 15 per cent increase in pensions, and a thirteenth month’s pension incorporating this 15 per cent increase. On 1 January another measure was added to the family support scheme: women who have children after this date will not have to pay any personal income tax until they reach the age of 30. In such a difficult period, this is an achievement that the whole country can be proud of.
Ladies and Gentlemen,
It is one year since Russia attacked Ukraine. This war is not taking place at an inconceivable distance from us: this war is taking place in a country neighbouring us, and it is taking its toll on everyone. It is bad for Ukrainians, it is bad for Russians, it is bad for Hungarians, it is bad for Europe, and it is becoming clear that it is bad for the whole world. Hundreds of thousands of people are dying, and an unimaginable amount of assets is being destroyed. The Hungarian government looks on with grave concern as, step by step, the whole of Europe is drifting into war. European countries are already sending tanks, fighter jets are already on the agenda, and if this continues, there will be those who want to send troops to Ukraine. Last April Hungarians decided that Hungary should stay out of the war, and they confirmed this in the national consultation at the end of last year. This is why we are not supplying weapons, and why the Hungarian government remains on the side of peace. We want the war to end as soon as possible, because we believe that in this war no one can win. All that can happen is that the number of those experiencing loss and the scale of the losses will grow day by day. Hundreds of thousands of people have died since this war started. For as long as this war has been going on, inflation has been sweeping the world, and there is the constant threat of economic crisis.
If this war continues, ever more people will die. If this war continues, hyperinflation and the threat of economic collapse will become permanent. If this war continues, no one in the world will be able to feel safe and the war could easily become a global one.
The fighting can only be stopped by a ceasefire. Therefore a ceasefire is needed and peace negotiations must begin. In every international forum Hungary is calling for peace, and I see that the majority – the great majority – of the world is also in favour of peace. Hungary cannot isolate itself from the majority of the world, the majority which wants peace. We therefore also consider China’s peace plan to be important, and we support it. On the first anniversary of the outbreak of war, Hungary should make it clear that it shall not change the position it has held up to now. This is why I support the motion from Fidesz and the Christian Democratic People’s Party MPs who call on this House to adopt a resolution on the anniversary of the war which states that Hungary remains a supporter of peace and wants to stay out of the Russo-Ukrainian war in the future. A clear resolution by Parliament is also necessary, because Hungary is under enormous pressure every day. Everyone can see that they want to press us into the war. They want us to join the pro-war countries. This is openly talked about in the centres of political power, but it is also sought by international speculators, who want to make money from the war. On a global scale financial speculators are financing media concerns and pro-war bodies that call themselves civil society organisations. Hungary is subjected to provocations on a daily basis. I ask you not to react to provocations and to stand up for Hungary’s interests in the arena of international politics.
Mr. Speaker, Ladies and Gentlemen,
Since our last sitting, the Government has taken a number of decisions to combat inflation. As I see it, governments in Europe are responding to inflation with two types of policy: there are those who are biding their time, and there are those who are intervening in the economic process. We belong to the second group. We are aware of the risks of intervention, but we think we can intervene in the fabric of the economy at the right points and to the optimal depth. This year we cannot eliminate inflation, because its causes are not in Hungary: with its sanctions on energy, Brussels has unleashed this affliction on us. The illness is called “sanction-induced inflation”, and the virus is the Brussels sanctions themselves. You too know that Hungary has never agreed to the sanctions. We continue to say that this policy is more damaging to us than to Russia. And now it is clear that although Russia was the target of the sanctions, it is in fact Europe that has been hit by Brussels. The sanctions are causing energy prices to rise, and this is making everything more expensive: it is making transport more expensive; it is making production more expensive; it is also increasing food prices, shop prices and the prices of services. It is a domino that has been tipped over in Brussels, and the effect is running through the whole of Europe. Inflation simply cannot be eliminated until there is peace and Brussels lifts the sanctions. And while it is true that inflation can only be eliminated by Brussels, it can be mitigated by the Member States. This is why Hungary must act, and this is why the Hungarian government must intervene in the economic process. Let us mitigate it. We also have to reckon with the fact that the higher the industrial production of a country, the more energy is needed – and therefore the higher the inflation that is caused by rising energy prices. A country which has no oil or natural gas and which has to import a large proportion of its energy is particularly prone to the torment of inflation – and Hungary is such a country. We have a high level of industrial production, but we do not have our own energy sources; and therefore sanctioned energy prices are leading to above-average inflation in Hungary, which will take longer to bring down.
Ladies and Gentlemen,
As I have said, we will not be able to eliminate inflation as long as the sanctions policy lasts, but by the end of the year – by the end of 2023 – we will be able to cut inflation back to single digits. To this end we have so far adopted twenty measures to reduce inflation and protect families. Of these twenty measures, ten are to protect jobs and ten are to protect families and pensioners. I will now present them.
We are supporting small and medium-sized enterprises active in energy-intensive manufacturing with a total of 220 billion forints. We have announced the Széchenyi Card Programme, and in 2023 we will spend 290 billion forints on a preferential loan programme for Hungarian small businesses, which will give those businesses access to loans at a 5 per cent interest rate – unlike other inflationary rates. We have announced the Factory Rescue Programme and the related Factory Rescue Guarantee and Loan Programme. This year we will spend a total of 230 billion forints in supporting energy efficiency programmes for large companies, and a 200-billion-forint loan programme will be launched by the Hungarian Development Bank and Eximbank. These two together amount to 430 billion forints. We are launching a re-industrialisation credit programme named after [the 19th-century government minister] Gábor Baross. The initial budget will be 700 billion forints, for a programme of preferential fixed-rate loans to finance the export-enhancing investment activities of Hungarian businesses. We have extended the interest rate freeze to small and medium-sized enterprises: to loans for small and medium-sized enterprises. This will cover a total of 2,000 billion forints in loans and will help sixty thousand businesses by capping the interest rate at 7.77 per cent. As our sixth point, we have set up a new national capital holding company. The National Capital Holding Company will make 1,000 billion forints available to help businesses get their capital situation in order, so that a lack of capital does not become a barrier to retaining jobs. We have announced an agricultural moratorium: a moratorium on loan repayments to protect Hungarian farmers, during the sixteen months of which 7,500 agricultural businesses will be relieved of repayments and interest on loans totalling 285 billion forints. We are announcing a tourism action plan to ensure that businesses in that sector do not have to pay development contributions. We have not cancelled them, but we have suspended them. Meanwhile we are accelerating the use of SZÉP Cards [for payments for recreational activities], so that Hungarians can spend their money here at home. With Decision Number 9 we are increasing the level of support for commuting to work. There was already a tax allowance for commuting costs in Hungary, and we have doubled it; this means that the employers of 100,000 employees will be able to offer tax-free subsidies for commuting costs at twice the current rate. And finally we have announced a labour support programme. For six months we will pay companies 50 per cent of the wages of jobseekers they take on who are under 25, or who have been unemployed for at least one month if they are 25 or over.
The following ten measures have been enacted by the Government to help families. We have decided to maintain the system of reduced household utility charges for 2023, up to the average level of consumption. We expect that in 2023 also the reduced prices of utilities will be half the market price for electricity and a quarter of the market price for gas. This means that the average Hungarian family will save 181,000 forints per month through reduced prices. This is unique in Europe. It is safe to say that Hungary is the country in Europe that spends the most on subsidising families’ utility costs through reduced prices. This is why Hungary has the lowest household gas and electricity prices. We will keep this level in 2023 and we have created the financial resources to cover it. We have increased the minimum wage and the guaranteed wage minimum. Between 2010 and 2023 we have tripled the minimum wage. This is the fourth highest increase in the European Union over this period. The thirteenth month’s pension was reinstated on 1 January 2022. The situation was much easier back then, because that was before the war, but looking at our financial situation we can still pay the thirteenth month’s pension in 2023 – and indeed we have already paid it in a way that will not increase the budget deficit. The Government has extended and expanded the food price freeze. We have taken the decision in principle that this price freeze will remain in place until we can bring down inflation: sanctions-induced inflation. This is also true for the retail interest rate freeze, which we have also extended and expanded. This measure – the retail interest rate freeze – protects 350,000 families against interest rate rises. We will phase out this scheme when interest rates start to fall. The Government has also expanded the interest rate freeze to cover student loans. This type of interest rate freeze protects 200,000 students from inflation. The Training Loan and the Student Loan2 are interest-free, and the interest rate on the freely-disposable Student Loan1 is half the market rate. We will be able to finance this in 2023. The Government also decided to reduce the cost of maintaining basic bank accounts, we have cut the fees on basic bank accounts by two thirds, and this will remain the case in 2023. We have decided to reduce the cost of home insurance. We will significantly reduce home insurance premiums by opening up competition and tightening the regulation of premium rates. We are introducing a reduced-price county public transport pass, and from 1 May 2023 monthly national and county passes will be available for both bus and rail travel. The county pass will cost 9,450 forints per month and the national pass 18,900 forints per month. We reckon that people who use public transport to get to work could save several thousand forints – perhaps tens of thousands – every month. And finally our tenth measure includes extension of the firewood programme and the firewood benefit programme. Firewood can be purchased directly from forestry companies at a discounted price in 152 locations across the country, providing families with a total of more than 1.5 million cubic metres of firewood every year.
There are also those who benefit from sanctions-induced energy prices. The figure is not final yet, and it is an approximate forecast, but the profits of the world oil and gas industry increased from 500 billion US dollars in 2021 to 834 billion US dollars in 2022 – from 500 billion US dollars to 834 billion US dollars! This was in a single year. The profits of the energy giants are breaking records all over the world, with profits up by around 70 per cent. Meanwhile these great mammoths have not innovated and have not produced more, but have simply pocketed profits which have been swollen by the sanctions. Moreover, US companies are selling gas to Europe at a much higher price than they are selling it at home, which means that the majority of the profits from sanctions have been paid for by European companies and the European public. The big international trading companies have made windfall profits through increased prices, and the banks have also made windfall profits through increased interest rates. Hungary decided in 2022, and we will repeat this in 2023, to deduct part of the windfall profit in Hungary – not earlier profits, but windfall profits, and not all of it, but part of it. We will put this into the Pension Protection Fund. From this fund we will finance the measures to help Hungarian families and Hungarian businesses which I have just described to you. Here I would once again like to make it clear that the reductions in families’ household utility bills will remain in 2023, as will the taxes imposed on windfall profits.
I would also like to inform you, Honourable House, that the Government has taken decisions on long-term energy policy. Over the next decade we will modernise Hungarian industry and develop it at a rapid pace. Our plan is to pursue an economic policy favourable to domestic and foreign investment. In this new industrial policy we will need much more energy than today, and urgent decisions have had to be taken. We have taken the necessary decisions to develop green energy, we are building – and even want to accelerate – Paks II Nuclear Power Plant, and we have also decided that gas turbine power plants should be brought on stream. At the same time, we have concluded an agreement with Azerbaijan on new gas supplies. I would also like to draw your attention to and remind you about the southern interconnector, through which gas arrives in Hungary, and which has become a powerful asset for the Hungarian economy. The blowing up of Nord Stream – which indeed happened, as you are aware – was a simple act of terrorism. Whoever was responsible, it was a terrorist act. And what we need to understand is that if they did it in the north, just to stop gas from Russia coming into Europe – if they blew up the northern pipeline to do that – then they can do it in the south. Together with Serbia we have made it clear that if this were to happen, it would not be so easy to get away with it: it would not be so easy to conduct a cover-up, as is now being done in relation to the blowing up of the Nord Stream pipeline.
In recent weeks the Government has also had to deal with a shocking and outrageous case of paedophilia. We have had to review the situation, and I am sad to inform the House that in Hungary the number of cases of child pornography is rising sharply. In 2017 we detected 120 cases of child pornography, and in 2022 the number had risen to 261. From 120 to 261 in four or five years! How this can happen in Hungary is beyond comprehension. Such things have no place in Hungary – especially not in our schools. Therefore the Government has given the Hungarian authorities clear instructions to investigate all such cases. We expect – and I myself expect – the heads of local education authorities and school principals to take immediate action in all such cases. It is our job as adults to protect children, and this is true not only for us as parents: it is also true for teachers, school principals and heads of local education authorities. Such disgraceful cases show that this whole issue of gender, of gender propaganda, should not be taken lightly and should not be treated as a joke. It is a serious matter that endangers our children and underlines the responsibility of adults. Furthermore, the opinion of Hungarians is clear: last year, on 3 April, there was a referendum on child protection in which 3.7 million Hungarians unanimously rejected gender propaganda – even if it comes from Brussels. Even if the whole world goes mad, even if Brussels defends the indefensible, Hungary should remain an island of normality in Europe, a place where families can send their children to school in safety! I call on all parliamentary groups, regardless of party affiliation, to cooperate in protecting children.
Mr. Speaker, Honourable House,
I must also mention that in recent weeks Türkiye has been hit by an earthquake. Türkiye is our friend, and indeed our ally, which is why we Hungarians were among the first to be there on site. It is a testament to the strength and expertise of our emergency services that they managed to save the lives of dozens of people. We owe them our respect, our thanks and our pride.
And, Honourable House, I must also say that we Hungarians must always stand up for our compatriots beyond our borders – especially in times of war. We mourn those Hungarians who have died on the front line in the Russo-Ukrainian war. It is painful that, even during the war, our compatriots in Transcarpathia are being subjected to oppression in Ukraine, that the right to use the Hungarian language is being trampled on, and that the principals of Hungarian schools are being replaced. The Foreign Ministry of Hungary must take a clear stand and make it clear that the Hungarians of Transcarpathia deserve more respect than this.
Honourable Members, Mr. Speaker,
To sum up, I can tell you that in 2023 we will have to deal with the dangers of continuing war, inflation and the ongoing threat of migration on our southern borders, while at the same time we will need to stand up for our compatriots beyond the borders. As you can see, 2023 will be a dangerous year. In this dangerous year, our Fundamental Law’s commandment is more timely than ever: “May there be Peace, Freedom and Accord.” Please, regardless of party affiliation, let us unite to help Hungary through this dangerous period.
Thank you for your kind attention.