Economy
Hungary EcoMin announces 6-year contribution halving scheme
The government is of the view that it may plan ahead more boldly, as growth is a given, the state budget is stable which allow planning ahead by 18-24 months, Varga told a door step press conference.
The wage rise we have seen over the last few years needs to continue, and the cabinet estimates that
These are merely plans at this stage, of course, Varga said, adding that talks will continue. He underlined the government will strive to broker out a multi-year plan.
Imre Palkovics, head of the National Federation of Workers’ Councils, said that the government has recommended a bigger wage hike than they did.
In view of this, the unions are unlikely to put a crimp into the agreement.
The interest representative bodies had previously proposed a two-phase minimum wage hike, a 10.5% rise first and then another 12%. Compared to this the government’s offer is really generous.
The wage rise we have seen over the last few years needs to continue, and the cabinet estimates that
it could mean a rise of up to 40% at real value over the next six years.
As a first step the cabinet proposes the 4 percentage point contribution reduction in 2017 to be followed up by a 2ppt cut in 2018. If a 6% real wage rise comes to pass then, it could create room for a 2ppt reduction in each of the following four years, i.e. the whole programme could last until 2022.Over a six-year period the 27% social contribution tax could be lowered by 14 percentage points in total.
The minister also noted that at the reconciliation talks the government proposed a 15% minimum wage hike and a 25% hike to the guaranteed wage minimum for 2017. Accordingly, gross minimum wage would go up to HUF 128,000 from HUF 111,000 currently, whereas the minimum inter-professional salary would be HUF 161,000 instead of the current HUF 129,000. If this plan goes through, the minimum wage could rise by additional 8% to HUF 138,000 in 2018 and the guaranteed wage minimum could rise by 12% to about HUF 180,000, provided both the employers and employees nod on the cabinet’s plan.These are merely plans at this stage, of course, Varga said, adding that talks will continue. He underlined the government will strive to broker out a multi-year plan.
Imre Palkovics, head of the National Federation of Workers’ Councils, said that the government has recommended a bigger wage hike than they did.
In view of this, the unions are unlikely to put a crimp into the agreement.
The interest representative bodies had previously proposed a two-phase minimum wage hike, a 10.5% rise first and then another 12%. Compared to this the government’s offer is really generous.
