Gergely Szakacs -
The pre-election fanfare over Hungary’s stellar growth and surging wages hardly registers with Laszlo Reisch, an employee in a government works programme who is stuck on the wrong side of a growing social divide.
Prime Minister Viktor Orban is widely credited for putting public finances on a sustainable path after 2010 to save Hungary from what he said would have been a Greek-style economic collapse under a tower of debt.
Fuelled by a construction boom, foreign investment and European Union funds, the economy grew by 4 per cent in 2017, the fastest pace in three years — good news for the 54-year-old premier as he targets a third term on April 8.
The turnaround in headline economic figures has not benefited all Hungarians, however.
The introduction of a flat tax, curbs on social benefits and Orban’s focus on building up the middle class means the gap between rich and poor in Hungary is widening, economists say.
Reisch, a 48-year-old father of two, said he can feel it.
“Together with my wife’s salary we can get by so that we do not need to go sifting through the garbage,” he said.
His daughter is among the millions of eastern Europeans who have moved abroad in search of higher pay.
Reisch says he will vote for Orban’s Fidesz party because there is no viable alternative. He is concerned about economic uncertainty under a new government, as well as immigration, a focal point of Orban’s re-election campaign.
Reisch has been employed in the public works programme for the past year and a half and is now working on renovating an empty house bought by the local council.
The programme is the government’s main tool to boost employment among mostly low-skilled Hungarians but the 165,000 it employs have missed out on double-digit wage rises because their salaries were frozen at 2017 levels, meaning their relative income has deteriorated steadily over the years.
Reisch, who used to work as a car mechanic, has been trying to get a job as a driver but says he cannot put aside enough money to pay for the new certification required.
The flat tax and cuts in jobless and other benefits have contributed to what the European Commission said in a 2017 report is one of the biggest rises in inequality across the EU since the financial crisis.
The government’s revenues from consumption-related taxes, such as VAT and excise taxes on tobacco and alcohol, relative to household spending is the highest in the EU.
Orban has also launched a housing scheme for families with three children that includes a 10-million-forint grant and a subsidised loan as part of efforts to lift birth rates. Families with fewer children are eligible for lower amounts.
One woman said she bought a bigger house near Budapest for herself and her two small children using a 1.5-million-forint grant.
“I think our family has managed to make progress over the past years,” said the woman, who like several people interviewed did not want to be identified talking about their personal finances. She said the grant allowed her family to upgrade earlier than expected. “I am grateful for that.”
The latest available Eurostat data showed Hungary ranked last among its Central European peers — Poland, the Czech Republic and Slovakia — in terms of per capita gross domestic product in 2016. Hungary’s relative position within the group has also deteriorated since Orban took power.
Most polls indicate Fidesz still enjoys a wide lead over its rivals even though a recent survey by thinktank Zavecz Research showed a majority of respondents have experienced no improvement in their financial situation over the past years. — Reuters
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