PM Viktor Orbán plans to limit state borrowing to investments

Budapest, March 11 (MTI) – Government borrowing next year will be restricted to investments and will not be used to run the state, Prime Minister Viktor Orbán said on Thursday.

This is the only way to balance the budget, Orbán said at an event organised by the Hungarian Chamber of Commerce and Industry (MKIK).

Orbán said Hungarian economic policy aimed at lifting growth to above 3 percent and an attempt would be made this year to reach this threshold.

“Bureaucrats will be put to work on the economy,” Orbán said.

The prime minister insisted that wage hikes must only be paid for with real money.

Noting the European Union’s censure of Hungary’s unified voucher system, he said a solution was for employers to convert vouchers into cash payments from Jan. 1, next year. Salaries are taxed in two ways: payrolls are fully-taxed while vouchers are partially-taxed, he said. Converting vouchers into cash will make the system more transparent and it is the only way to raise wages at a faster clip than economic growth, the prime minister said. But the state will not be obliged to pay pensions on the part of wages that enjoyed a tax preference that applies to vouchers.