"Tax cuts the only way to regain regional competitiveness"

János Áder, former Parliamentary Speaker and chairman of the Fidesz-Hungarian Civic Alliance (Fidesz-MPSZ) Parliamentary faction, is one of Hungary's leading opposition politicians. In an interview with The Budapest Times and Budapester Zeitung after the recent Fidesz party conference he said that if the party wins the 2006 elections, it would reduce taxes significantly in order to increase international competitiveness. He also had harsh words for the government's economic policy, which he claimed has foundered due to the Socialist administration's lack of coherent structure.

Dátum: 2005-06-21 16:12:00, eredeti URL: http://archiv.fidesz.hu/index.php?Cikk=39909
KCMDB-be feltöltve: 2024-05-04 21:59:44.097354, Feltöltő: fidesz_hu_scraper_v2

János Áder, Fidesz-MPSZ parliamentary caucus leader

Tax cuts the only way to regain regional competitiveness

At the Fidesz party conference on the basis of a change to the statutes the number of deputy chairmen was increased from two to four. What was the reason for this increase and what is the division of responsibility in the party committee now?

Holders of office in our party must stand for re-election every two years - it was a case of that again. The expansion of the committee came about as a result of us evaluating the experience of the two years leading up to the conference. We didn't have to correct the rules, but there were a few scratches and dents here and there, hence the expansion. With the personnel decisions we wanted to underline our economic expertise: Mihály Varga was minister of finance in the Orbán government [the 1998-2002 Fidesz-led administration] and is now the leader of the budget working group. He will deal with macroeconomics on the executive committee. Ildikó Pelczné Gáll is a lecturer at the University of Miskolc and her specialist area is small- and medium-sized enterprises. These Hungarian firms, which provide the most jobs in Hungary, are especially important to us. Zoltán Pokorni [former education minister] will remain responsible for education and further education policy and Pál Schmitt [a Fidesz MEP] will continue to deal with European Union questions. The executive committee will work out the political strategy of the party for our manifesto and what will hopefully be the government's programme under the re-elected chairman Viktor Orbán and enriched by the expert contributions.

If your party is to be believed then Hungary, once top of the class for many years in Central and Eastern Europe, has completely lost its economic leadership in the region and has become the dunce of the class. Aren't you exaggerating? If you form the government in 2006 what can you do that is radically different from what the current government is doing?

It is simplest if I let the figures speak for themselves. Between 1998 and 2000, during the period of the Orbán government, our country was among the leaders as far as economic growth was concerned. Now it is not even 3% and with that we are one of the back markers. During our government the rate of unemployment went down from 9% to 6%. Now it amounts to more than 7%, with the number of unemployed in the meantime having broken the psychologically important 300,000 barrier. In the last six months unemployment has risen by 42,000. These figures should be looked at bearing in mind that Prime Minister Ferenc Gyurcsány's has named fighting unemployment as his most important aim. Every fifth young person who enters the job market does not find a job. The rating agencies are downgrading Hungary, so every time new credit is taken up it will be more expensive. During the election campaign the socialist-liberal team repeatedly promised that they would significantly decrease tax if they were elected. And? Thirty-three tax increases followed and six new types of tax were introduced. Only income and company tax were decreased by 2%. But at the end of the day everyone is paying more tax than they did when we were governing. We will act along the lines that Hungary's future lies in tax reductions. Taxes and contributions are so high that Hungary is suffering from a clear disadvantage in international competitiveness.

If you win the 2006 elections, you will not be able to change the basic conditions of the Hungarian economy. You also know that Hungary, for example, has no influence on the price of crude oil. So bearing these kinds of unalterable conditions in mind, what are you accusing the government of in concrete terms? Where has Gyurcsány's cabinet failed?

One of our greatest points of criticism is that the current government can offer no clear coherent economic policy in which the individual measures relate to each other and mesh together. It just hunts for whatever PR and marketing opportunities it can. The daily routine work of the government in which a government order or perhaps two paragraphs of a law are changed is celebrated as a great success. The announced taxation of waiters' tips almost caused mass protests. [The government promoted] the idea that babysitting should likewise be taxed as if Hungary's whole wealth hung on it. It is laughable that helping one's neighbours, which is common in Hungary, should be taxed. When a granny asks the boy next door to saw off some branches in exchange for a few forints they are not committing a crime. And all of these measures are supposed to be a well-founded economic policy?

According to the latest OECD report - and previous reports by the American Chamber of Commerce [AmCham] in Hungary - corruption casts a long shadow in Hungary. This evaluation from these types of important organisations is not exactly flattering for the country. If these statements are indeed correct, do you see this as a further serious deficiency of the Hungarian economy?

According to an English newspaper "the deal of the century" was recently done in Hungary - begging the question: for whom? It wasn't for the taxpayer I fear! It was about the concession for the M5 motorway. The Deutsche Bank and TriGránit consortium bid, which was HUF 120 billion cheaper and which was superior to the competition on all other points, didn't get the contract. Another example: the state wanted to rid itself of part of MOL [the national oil and gas firm] when the share price was HUF 5,500 [EUR 22]. When we addressed the subject in Parliament, there was a pause and they were sold at HUF 6,500 [EUR 26]. At this point in time it was clear that MOL was going to separate itself from its loss-making gas business whereupon it was guaranteed that the share price would shoot upwards. Today MOL shares stand at around HUF 16,850 [EUR 68]. Conservatively calculated, this unnecessary wait was accompanied by a loss in income of HUF 120 billion [EUR 484 million]. If just the sums from these two examples are added then it comes to HUF 240 billion. This is a considerable amount anywhere in the world. This government preaches water while drinking wine.

Finally a personal question: you recently published a book entitled Visszaszámlálás (Countdown). What prompted you to do this in addition to your daily political work?

This book takes stock of the events of the last two- and-a-half to three years of our country - an X-ray of the political and economic state of Hungary if you like. With the help of my researchers in Parliament I have collected the facts, figures and independent economic data with the help of which I can comprehend what has become of the election promises of the government. It makes it unambiguously apparent that the economic position of Hungary is clearly worse than it was three years ago at the change of government. The government MPs deny this of course, but their statements have so far been unable to substantiate this with real facts. But so that the work is not too dry we have integrated quotes from world of literature, pictures, charts and even caricatures.

András Gulya

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"Tax cuts the only way to regain regional competitiveness"