Hungary Opposition Party Fidesz Releases Election Agenda

The Law Enforcement, Healthcare and Social Policy chapters were written by János Lázár, Imre Pesti and Miklós Soltész, respectively. A last, relatively shorter chapter by Tibor Navracsics deals with the Rule of Law.

Economic policy

What follows is a brief summary of statements, objectives and pledges in the Economic Policy chapter.

Focus on employment: To create 1 million new tax-paying jobs over the next decade.

Predictable economic/political environment: Strong budget, stable fiscal policy, less red tape.

Business development: The majority of new jobs should be created for prospective employees with no higher education, since unemployment and inactivity is relatively higher in this group. Construction, farming and domestic tourism are seen as the three key areas of national economy capable of creating and sustaining the bulk of new jobs for such employees.

Innovation, R&D: The future is creative industries and regional/global service centers. Small or large, all businesses depend on constant innovation, which requires a strategy and organizational units focusing on R&D. A government funding program should be implemented to assist SMEs with limited research capabilities in order to promote innovative research and development.

Flexible, family-friendly employment structure: Atypical forms of employment, such as part time, telecommuting and self-employment have the potential for an increase in employment on a mass scale.

Entrepreneurship: The key objective here is to reduce paperwork and red tape. The current, bewilderingly complex and sometimes unfairly applied tax system should be simplified, along with the excessive administrative burden that results from intricate regulations pertaining to various business activities. Businesses are expected to save an aggregate HUF 300 billion to 500 billion per year as a result.

Interest rates: It is in the best interest of businesses active in Hungary that the benchmark interest rate is lowered to the Western European level as soon as possible.

Domino effect of overdue debt: SMEs waiting to be paid for supplies/services provided to another company should not be required to pay VAT on revenues they have not yet been able to collect. The government should not fall behind with payments. SMEs approved for EU funding should receive 50% advance instead of the current 25%. 1-month payment deadlines to be implemented for government disbursements.

Construction industry: Revision of current government tender practices is unavoidable, even if this takes fighting entrenched economic and political interests. The government should embrace the European initiative to promote energy efficient building construction. Overhauling 10% of residential properties each year would create 80,000 jobs in the construction industry, an investment that would pay for itself in less than 10 years and ensure Hungary is meeting environmental commitments.

Food industry: Hungary needs stronger and more efficient food safety and health authorities. Harmful foods of uncertain origin and ersatz foodstuffs should not be allowed to enter the country.

Public procurement: Allocation of EU funds in line with European norms requires at least 70% participation of Hungarian companies in public procurement tenders. It is the government’s responsibility to promote this with direct and indirect measures, such as targeted supplier ratios from Hungary and abroad.

Vocational training: More practical courses, less theoretical education.

Higher education: (Only one sentence on this subject) Currently 50% of college and university diplomas are useless in the job market, therefore freshmen should be provided with more information on the real-life value of various degrees.

Business-friendly local governments: Review of tax distribution between local and central government.

New Széchenyi Plan: Reallocation of EU funds to sectors that drive GDP growth and promote employment, implementing a new system which ensures fast access to and use of EU funds. At present, too many businesses receive small funds, for the most part subsidies are not directly targeted towards specific objectives for national economic development.

Public works programs: These programs should provide work opportunities for Roma and unskilled workers in construction and agriculture. Public works enable governments to involve huge masses of laborers in major projects that create new value (such as building dams, afforestation or council housing construction).

Portfolio.hu viewpoint:
At the first glance, Fidesz appears to have produced a government agenda with a focus on objectives and attention to the details of the institutional background. The content is in line with previous campaign statements - no surprises here. However this is partly due to the fact that this is a very broad, generic agenda with few mentions of specific commitments or intended measures. The document does not reveal what steps Fidesz is planning to take once in power.

The general direction is familiar from a recent speech by Prime Minister candidate Viktor Orbán: the agenda outlines patriotic sentiments, protectionist economic policies, and a government that is ready to address certain institutional and structural problems. Knowing the measures that will be implemented these objectives would be crucial to evaluating the agenda, however at this point little is known of the details.

Of the nearly 100-page document, only one page deals with retirement "in detail", without any surprising new features. The final conclusion is that the Socialist/Liberal governments of the past 8 years have continuously "kept old-age pensioners in uncertainty", however if Fidesz is voted into power, retirees need fear no more as the welfare of seniors shall be the cornerstone of policymaking under the new administration.

The document pledges protection for senior citizens to ward off threats to their day-to-day livelihood, while "restoring a raison d’etre" for multi-generation families.

Healthcare

"The new government will consider it a number one priority to bring the present state of disarray to an end and create a predictable system," the Healthcare chapter of Fidesz’s "Issues of National Concern" program declares. Imre Pesti, the party’s healthcare strategist, summed up policy plans in 9 points on 4 pages.

The Healthcare chapter is based on the standpoint that previous governments during the past 8 years have "forfeited the healthcare sector" (i.e. the National Healthcare Fund has been weaned off HUF 400 billion in government funding, service providers are struggling with a higher workload, infrastructure is dated and falling apart). The document argues that "the fact that the sector is still functional is due to loans from suppliers, and the commitment of doctors and nurses who persevere despite the difficulties". This statement does not come as a surprise as Pesti has made several comments to this effect in recent debates over hospital financing.

The Healthcare chapter can be summarized as follows:

1. Structure of health services: The new government’s objective is to bring the present state of disarray to an end and create a predictable system in order to make waitlists shorter and improve service quality. "Hospital closures are not a real alternative even in the medium term," the document argues. Commitments:
- To consolidate accumulated hospital debts
- To keep hospitals in state ownership
- To replace dated ambulance service equipment without delay

2. Financing: Hungary spends too little on healthcare. "We spend about HUF 300 billion less than the neighboring countries." Commitments:
- No need for "Doctor’s visit fees" (controversial fee per appointment which was approved by the Socialist government a few years ago but failed soon after)
- Healthcare financing should be planned for years ahead
- Amortization as a concept to be introduced in healthcare finance

3. Health insurance: A uniform national health insurance system to be operated, insurance fund to be invested with increased powers of audit and control

4. Drug administration:
- Mid-term contracts between the National Health Insurance Fund and pharmaceuticals
- Reduction of manufacturers’ extremely high marketing costs
- Support for the generic drug program
- Creating an approval and subsidy system for high-tech biosimilar drugs
- Promoting competition from equivalent imported drugs
- Re-regulating pharmacy operating permits
- Review of the Drug Cost Efficiency Act

Portfolio.hu viewpoint:
From the point of view of pharmaceuticals Egis and Richter, some of the above drug administration measures are negative (marketing cost cuts, competition from imported drugs) while others are positive (generic program, promoting biosimilar drugs). However as specifics are far and few between, this point is difficult to evaluate.

5. State National Health and Surgeon General’s Office (ÁNTSZ): Restoring the organization to its earlier role, reinforcing its legal powers

6. Hungarian Medical Association and other professional organizations: Review of their operation and reinforcing their position

7. National Health Program: Legal guarantees are required to finance the National Health Program.

8. Human resources:
- More doctors and nurses needed
- Resident training system to be reviewed
- Step-by-step measures to eliminate the widespread practice of "tipping" doctors: self-employed status with appropriate remuneration

9. The role of healthcare: "A review of the role of health."

Portfolio.hu viewpoint:
On the whole, the healthcare chapter lists general statements, with very hardly any mention of specific commitments. There are no surprising elements in these broad statements, as they run along the policy lines outlined by Fidesz strategists earlier.

A large part of this chapter is a critique of government failures in the past 8 years (with comments on "pretense of reform"). What we would expect from a soon-to-be governing party is to identify goals and specific tasks ahead instead. The emphasis is on failed measures of the past, which eclipses the new agenda which is regrettably lacking in specifics.

The keywords of the Healthcare chapter are "review", "reinforcement" and "support" (without mentioning specific measures), while the party avoids words like "restructuring" and "reform" - which is not surprising in light of the recent years’ policymaking. Hopefully, we will soon (after the new government is sworn in) have an opportunity to learn how Fidesz is going to "review" the healthcare sector.

Preserving the purchasing power of retirement pensions is a recurring issue throughout the document - however this is not a new commitment but actually part of the law. What’s more, the law allows the real value of old-age pensions to increase above inflation as long as economic growth is high enough to sustain higher government spending on pensions.

The agenda mentions plans to set up a complex service system to ensure the recognition and safety of senior citizens, however at this point this is no more than a sketchy draft rather than an elaborate plan. Later on, a mention is made of a personalized service system that would make life easier for the retired.

According to the election agenda, Fidesz places great emphasis on employment opportunities and greater social recognition for the elderly.

Portfolio.hu viewpoint:
Again, nothing radically new - the plans outlined above are all in line with the recently approved National Senior Citizens Strategy. On the other hand, it is reassuring to know employment for the older generations is a key policy area for Fidesz, and the party is aware that this issue requires a change of mentality in Hungarian society as a whole.

A brave new world shines through the lines

As regards the general logic of the retirement pension system, the chapter is devoid of any of the highly controversial statements by Fidesz in recent months. However, there is a sentence that can be seen as food for thought. The party pledges "to change hitherto the prevalent Socialist and Liberal practices to make sure no one can pit generations against each other in the future".

In the current framework of Hungary’s retirement pension system, this would be a very difficult goal to accomplish, as the logic of the unfunded system makes permanent tension between different generations inevitable. At any time, the then active population is responsible for covering the costs of pension payments, and notwithstanding the 1997 pension reform, the bulk of pensioners’ "paychecks" still depends on the active generation.

Since the document does not elaborate on the concept in detail, it is possible that this sentence is nothing more than election rhetoric. However if one tries to read between the lines, the document is possibly suggestive of a new system to be implemented by Fidesz in which the generational conflict could be at least partially avoided.

Portfolio.hu viewpoint:
In theory, one possible solution for this would be to gradually dismantle the state "pillar" of the pension system and move it closer to the "second pillar", that is create a new system in which each person would be solely responsible for their retirement income by creating a "nest egg" for their old age.

There are other solutions, such as the oft-discussed Notional Defined Contribution system, in which the state pillar is organized along an entirely different logic. As discussed by Portfolio.hu in earlier articles, the adoption of this system would ensure the stability of pension payments in theory as well as in practice. The NDC system rules out generational conflicts as everyone would be required to contribute an equal share of their personal incomes (of course this only applies to pension contributions).

Last but not least, the election agenda comments on the recent Socialist attempt for organizational structure change, declaring that Fidesz will not allow pension reforms to endanger private pension savings that complement state pensions.

Portfolio.hu viewpoint:
Portfolio.hu has not perceived a threat to private pension savings, as these are managed by organizations with financial expertise. On the other hand, it is of much greater importance to create a clear legal and institutional framework for private pension savings which the reforms were seeking to achieve.