Layoffs in public administration also part of Hungary's fiscal adjustment package

The paper says that under the plan, any government department, ministry or back office could be forced to sack several employees.

This is the specific wording of this part of the budget bill:

"The Government shall be empowered to determine, in order to achieve the budget deficit target for 2023, the manner in which the savings resulting from staff reductions in organisations financed from the central budget and under the direction or supervision of the Government and designated by it shall be applied".

According to the paper, the government is aiming to save HUF 30 billion on the expenditure side by this measure. News of the redundancies in the public sector is not entirely unexpected. When the adjustment package was presented at the end of May, Gergely Gulyás, minister leading the Prime Minister's Office, had already indicated that a few hundred people could be laid off as part of the adjustment measures.

Also, a briefing paper sent to investors said that spending cuts would be made at ministries and support institutions, which could amount to 1% of GDP. Part of this is what the government calls efficiency cuts.

And Finance Minister Mihály Varga, speaking at an event of the German Chamber of Commerce, said that digitalisation and strong administrative development in the online space could help other institutions besides the tax office and the treasury to improve efficiency, so that employment growth could continue with labour freed up in the public sector.

In essence, this is part of the HUF 4,200 billion adjustment package. The government plans to cut spending by HUF 580 billion this year and HUF 500 billion next year.

There are more and more reports that serious cutbacks are planned in government offices, where more than 37,000 people work, Erzsébet Boros, president of the trade union of Hungarian civil servants and public employees (MKKSZ), told Népszava. According to their information, government offices will not be uniformly affected by the layoffs. They know of plans to reduce staff by more than 10% in Szabolcs-Szatmár-Bereg county, but the capital city organisation would not be affected.

The paper contacted the Prime Minister's Office, which said that "the government is committed to cutting red tape, and we have already implemented a major downsizing in 2018".

Our aim remains to employ only as many people in the central administration as are absolutely necessary,

they wrote.

According to messages received by the newspaper from district and county government offices, the 10% cut in the ministries' budgets will not primarily mean a reduction in the number of staff in the ever-expanding central apparatus, but rather the dismissal of staff in rural offices and institutions. Even now, those retiring are not being replaced. The MKKSZ counts 618,000 civil servants, the number of people who receive some form of salary from the state. 

Cover photo: MTI/Tamás Kovács