Tisza’s first budget taxes the rich, rewards the workers — and wants to bury Orbán’s legacy

The 2027 budget will be the budget of justice and progress, the budget for the reconstruction of Hungary — said Prime Minister Péter Magyar at Monday’s session of the National Assembly, before the agenda.

The Prime Minister highlighted that the Tisza government had prepared the 2027 budget over the past weeks and months, that it will be sent to the Fiscal Council this week, and that the draft will be submitted to the National Assembly at the end of the month.

He stressed that this will be “the first budget since the change of regime” to transform entire systems with the goal of building a just, developing, functioning, and humane homeland in place of a country tailored to “the privileged of the Mészáros faction.”

The Prime Minister promised to address the serious injustices inherited from the Orbán regime, stating that now is the time to begin the work of remedying the serious injustices they inherited from the Orbán regime.

“Perhaps as the first government, we will fulfil a significant portion of our commitments for the four-year governing cycle — far exceeding what would be proportionate to the time elapsed — already in the first full year of our governance,” he said.

He stated that millions of Hungarians had fought to stop the destruction, to begin rebuilding the country, and for the redress of millions of Hungarians “for all the injustices they had suffered in recent decades,” and for the years of the country’s progress to finally arrive.

In his view, preparing next year’s budget is far more than a routine task for a government: after 16 years of destruction, it will provide an answer to what will make Hungary a strong, confident, prosperous, functioning, and humane country. This can be achieved if people are able to move forward and find security, respect, and opportunity in their homeland, he added.

On the subject of redress, he said there is no Hungarian who has not personally experienced “the serious injustices of the Orbán regime,” or who does not know someone who has been affected by them.

Péter Magyar said they inherited ruins, that they took over the country in such a catastrophic state — stripped bare — that even preventing further collapse was and would remain a gruelling task. In his view, the extent of the damage had been vastly underestimated. “We inherited a worn-out, demolished, devastated, and looted country from the previous government,” he summarised, noting that many had warned the government against addressing the “glaring” injustices at the same time as putting the country’s economy in order.

He touched on the fact that the previous government had adopted the 2026 budget with a deficit of 3.7 percent, while the real deficit would have been 8.3 percent had the Tisza government not immediately cut off the flow of public funds and brought home EU resources. “The irresponsibility and immorality with which they handled the country entrusted to them is incomprehensible,” he said, also accusing the previous government of having driven the economy into the ground.

“You promised a flying start, but only your private jets took off,” he declared.

He pointed out that, in his view, the Orbán government had saddled the country with the highest interest payment burden in the EU. Between 2020 and 2025, Hungary paid 9,200 billion forints more in interest than the Central European eurozone countries paid, he explained. He stated that Hungary had spent more on loan interest — due to the previous government’s “dilettantism and corruption” — than it spent on education and healthcare combined in 2024.

He announced that from 2027, the government will reduce the income tax on the minimum wage to nine percent. For monthly incomes below 680,000 forints, personal income tax will decrease, with almost two and a half million Hungarians set to see their personal income tax reduced from 1 January 2027.

The prime minister said that through this tax cut, the government would leave a total of approximately 250 billion forints with around 2.5 million working people.

For an employee earning the minimum wage, this tax cut will mean an additional monthly income of 20,000 forints and an annual extra of 240,000 forints, with no wage increase required, he added.

He noted that one million people will pay single-digit personal income tax, a further more than one million people will see their tax reduced on salaries up to 680,000 forints, and no one’s tax on their work income will increase.

He assessed that the circle around former central bank governor György Matolcsy had stolen far more public money than this from the national bank foundations “under the watchful eyes of the State Audit Office,” and had this not occurred, more than two million people could have had their taxes reduced years ago.

“Orbán and the Mészáros Lőrinc faction chose the Matolcsy camp. We, the Tisza government and the well-meaning part of the country, chose working people,” he said.

Péter Magyar also announced that the government will double the family allowance from 2027. The prime minister said: “Hungary’s future lies in its children,” and therefore, in keeping with Tisza’s commitment, “after 19 years of governmental neglect and delay,” the family allowance will be doubled in a single step for every Hungarian child.

He stated that more than 1 million families will receive twice the support they currently receive each month, covering more than 1 million 600 thousand children. An additional 300 billion forints will be allocated for this purpose in next year’s budget.

The prime minister also announced that the personal income tax exemption for young people under 25 will be retained — they will continue to be exempt from paying personal income tax up to the average wage.

The prime minister also said that the personal income tax exemption for mothers will change: it will be maintained up to an income of one million forints, above which personal income tax will have to be paid. He explained that the tax exemption for mothers under 30, mothers under 40 with two children, and mothers with three or more children will be retained up to a gross monthly income of one million forints, and that the family tax credit for children will also be kept.

The system in which tens of thousands of high earners — some making several million forints a month — receive lifelong full tax exemption is unsustainable both from a budgetary and a fairness standpoint, has led to abuses, and has not functioned as a demographic incentive, said Péter Magyar.

He stated that “the Mészáros Lőrinc faction” had lied to mothers of two children by claiming that the personal income tax exemption would be extended to those over forty.

The Prime Minister said that nearly one million families would benefit from the restructuring of family support, and that the tax reduction would help more than two million Hungarian workers regardless of the number of children they have. They are working toward a country where people can plan ahead, raise children, build a home, and get ahead in life.

The government will spend significantly more on family support in 2027 than the Orbán government would have spent “based on its own lies,” he stated. He put it that they are doing so “far more fairly,” and that almost all Hungarian families will be better off from 2027. Everyone will also benefit from the fact that they are simultaneously putting the country’s finances in order, he stressed.

In his address, Péter Magyar announced that the government would increase disability and rehabilitation benefits by ten percent starting in January.

The Prime Minister also spoke about raising the minimum pension from 28,500 forints to 120,000 forints from 1 January, and increasing low pensions on a tiered basis. He added that this decision alone would provide significant assistance to 455,000 pensioners.

Speaking about local governments, he said that the Orbán system had suppressed, bled dry, and treated local governments as “political fiefdoms,” stripping them of their revenues, curtailing their autonomy, and humiliating them. We are breaking with this practice, he stressed, framing it as: for us, there are no Fidesz or Tisza settlements — we belong to one country and are responsible for every Hungarian citizen. He announced that the government would increase support for local governments by 64 billion forints next year, and reduce the burden of the solidarity contribution by 15 percent, or 62 billion forints.

He stated that an additional fifty billion forints would be provided to Budapest through the Budapest Transport Centre (BKK) for public transport, relieving the capital’s budget by that amount. State support for local public transport in regional cities would also be restored, with the government allocating 10 billion forints for this purpose, he added.

The Prime Minister said there was no need for patronage posts in local governments either, which is why “the rapid preparation for the elimination of the now entirely superfluous county assemblies — political patronage posts — is underway.”

He stated that tax money will no longer be spent on “maintaining political sports facilities,” and that public funds must finance services for local residents at every level.

He stressed that local government should finally become, in the true sense of the word, a place for people’s self-determination — where the will of the local community shapes public life and elected leaders are accountable only to those who live there — promising that the government will now provide more resources to that end.

He announced that the savings from the approximately 700 billion forints of “waste” cut from the 2026 budget will be maintained in the coming year, and will be supplemented in 2027 by a further 1,500 billion forints in spending cuts.

The prime minister said that maintaining the “Orbán system” had cost Hungarian people more than 2,000 billion forints annually, with people’s money going needlessly to overpriced procurement, “concessions that only enriched crony companies,” government communications, public media, and the upkeep of KEKVAs, while the former government side told people there was no money to give more. “But there was money!” — they simply chose to “steal it, take it home, spend it on other things.”

He elaborated that in the newly launched Sándor Wekerle housing construction programme, 30 billion forints in EU development funding will already be allocated in 2027 to affordable rental housing and student accommodation. In the three years that follow, through a phased system and drawing on 550 million euros in EU funds, several hundred billion forints will be channelled into the programme, with bank and market financing joining at least in equal measure, he explained.

In his view, the construction projects to be launched will be capable of influencing the housing market as a whole, meaningfully expanding both the proportion and number of affordable homes; the programme will simultaneously support young people in building their lives at home and give a boost to the construction industry.

He stressed that next year the reduced 5 percent VAT rate will continue to be available for the construction and purchase of new homes.

Péter Magyar described the Sándor Wekerle Plus programme as the government’s comprehensive home-creation programme. The prime minister stated that the Wekerle Plus purchase and construction loan is designed to help young people between the ages of 18 and 41 start their independent lives, on predictable and fair terms.

Péter Magyar also touched on the significant reduction in bank commissions, noting that banks had until now been the biggest winners of the Otthon Start programme. He added that under the new purchase and construction loan scheme, those between the ages of 18 and 41 can acquire property when buying or building a new home at a fixed interest rate of 3 percent; for used properties, financing is provided at a fixed interest rate of 5 percent.

A mandatory five-year residency requirement applies; the existing property ownership of the applicant and their spouse is strictly examined, and both must remain below 50 percent, he outlined the conditions. He indicated that previously concluded contracts will remain in force.

Regarding the Wekerle Plus housing savings scheme, he said it provides direct assistance in building up starting capital and the required own contribution. If someone sets aside a portion of their monthly salary for five to ten years, the state adds a direct, non-repayable grant on top of that, he said. According to his explanation, a ten-percent state top-up is provided on payments made during the first five years, and twenty percent from the sixth year onward, in addition to the existing three-percent bank interest rate.

Péter Magyar also spoke about the fact that the Wekerle Plus programme will include an energy efficiency and renovation support and loan component. This funding is provided specifically and exclusively for the energy-efficient modernisation of properties, he stated. He added that the programme will be made available in every settlement across the country, with no mandatory requirement of having children or being married.

The loan amount available will be raised from 6 million to 15 million forints at a fixed three-percent interest rate. The government will provide a non-repayable state grant of between 30 and up to 50 percent, and of no more than 7.5 million forints, for this loan, he explained.

For the energy renovation grant and loan, the level of support is tied to the energy savings achieved and the actual condition of the property. The condition is a minimum of thirty percent energy savings, with the state committing to a non-repayable grant of up to 7.5 million forints — thirty percent for properties with a medium energy rating, and fifty percent for properties with the worst energy rating.

The modernisation of twenty thousand households per year will be launched, with approximately forty billion forints in purely state funding, he announced.

The 2027 budget does not amend the rules on the baby-expecting loan, the family home creation benefit (csok), the rural csok, or the utility bill reduction scheme, said Péter Magyar.

The government is proud of all three pillars of the Wekerle Plus programme, he declared. He emphasised that they are providing support for getting started, affordable but fair credit for a first home or house, and assistance with modernising homes.

These programmes will not only allow the well-off to receive substantial help, but “many people, everyone”; and the beneficiaries of the system will not primarily be investors and — “as was the case under Fidesz” — the banks, but those genuinely waiting for a home or home renovation, he said.

He also announced:

Next year, 331 billion forints in EU funding will go toward railway and transport developments — 271 billion more than this year’s allocation. Passengers are owed tangible change after years of delays and missed developments, the Prime Minister declared, noting that 35 new high-capacity IC motor trains will be procured and 42 new HÉV carriages will be put into service.

He added that the renovation of the ten most important railway stations will begin, Budapest Nyugati station and its surroundings will be developed, and the reopening and improvement of branch lines will be set as a priority.

The Prime Minister announced that next year will see the launch of major railway investments that will also serve to restart the Hungarian construction industry — simultaneously generating orders for businesses, improving the quality of freight transport, and making more settlements accessible by rail. Under the Baross Gábor Railway Development Plan, Hungary’s fixed-track transport network will be renewed over ten years at a cost of 3,550 billion forints.

Artificial intelligence was used for the translation of parts of the original Hungarian text.