A job for Hungarian taxpayers can cost 360 thousand Euros

Last year, the government distributed HUF 1.700 billion (€ 4718 million)  in the form of investment aid, and a new job could cost taxpayers an average of 130 million forints (360 thousand Euros). This corresponds to an average gross wage of 27 years.

According to Népszava, in the last year before the pandemic, in 2019, the Ministry of Foreign Affairs and Trade distributed a total of HUF 105 billion (€ 291 million) to Hungarian and foreign investors for job creation and/or investment development support. At that time, creating a single new job cost taxpayers HUF 15.9 million (€ 44 thousand), which is the net salary of a skilled worker for at least three years.

The coronavirus epidemic has also brought about huge changes in the support program, which can be considered part of the “economic protection program”. According to Péter Szijjártó, Minister of Foreign Affairs and Trade, since the beginning of the epidemic, the Ministry has financed 1.434 investments worth HUF 1.676 billion (€ 4718 million). It was also found that companies are creating 12.603 new jobs and retaining 264.595. The subsidy per new job increased to HUF 132.9 million (€ 368 thousand) in 2020. This amount, calculated on the basis of the gross average salary of nearly HUF 400,000 (€ 1110) is the 27-year salary of an employee, which has raised serious questions about the government’s investment incentive policy.

The Ministry of Foreign Affairs assisted an investment with an average of HUF 1.1-1.2 billion ( € 2.7 million), the support intensity was 10-50 per cent, according to the Ministry’s announcements related to individual investments. Protecting jobs is the government’s communications panel, and companies have pledged, in exchange for state aid, not to reduce the statistical headcount. There has been no real survey of the number of redundancies planned out of the 264.000 ‘protected’ jobs before the aid was awarded, but presumably a fraction of that number.

This year, Péter Szijjártó will continue where he left off in December. On Tuesday, the government gave HUF 270 million ( € 749 thousand) to Heineken Hungária Sörgyárak Zrt.s HUF 540 million (€ 1498 thousand) investment in Sopron. In other words,

Hungarian taxpayers pay half of the investment costs to one of the world’s largest beer multiples.

The government can make such a high contribution because the European Union has temporarily suspended strict rules on illegal state aid because of the pandemic. Szijjártó justified the subsidisation of Heineken by strengthening its competitive market position – but did not explain why this is the task of Hungarian taxpayers. Szijjártó said that the Dutch company has undertaken to “protect” 465 jobs, in addition to buying raw materials from 85 per cent of domestic suppliers. The communication did not mention the creation of new jobs.

Last year, the Ministry of Finance headed by Mihály Varga did not work much cheaper in foreign affairs either: the government’s Corporate Investment Program belongs to the portfolio, under which only HUF 70 billion ( € 194 million) was paid to companies last year, of which nearly 700 new jobs are created by investors, which means 

 one job cost HUF 100 million (€ 277 thousand) for Hungarian taxpayers,

according to a Facebook video uploaded to the Minister of Finance’s website. The details also show that although the PM creates jobs cheaper – even if we can talk about it. Out of the HUF 70 billion ( € 194 million) subsidy, a HUF 155 billion ( € 430 million) development was created. The taxpayers accounted for 45 per cent for the subsidised investments.