With next year's budget, almost every Hungarian will be better off, but not all the problems and poor economic policies inherited from the previous government can be solved in a single year, Prime Minister Péter Magyar said on Tuesday at a joint press conference with Finance Minister András Kármán, at which the 2027 budget was presented.
The prime minister said that Hungarian people know, feel, and see that the previous government left behind a budget bled dry to the extreme, a ruined economy, dismantled public services, neglected infrastructure, a healthcare system in disrepair, a neglected social sector, and abandoned businesses. He added that the task of the Tisza government was to build on such unstable foundations and create a budget that would genuinely serve fairness and progress.
He stressed that the government is working to help as many people as possible and to offer a sense of perspective to those living both at home and still abroad.
This puzzle has been solved by this budget, he said.
The Prime Minister said that with the 2027 budget, almost every Hungarian will be better off — partly due to the development of the healthcare and social care systems, and also because of the single-digit personal income tax, the tax reduction for 2.5 million people earning above the minimum wage, the doubling of the family allowance, double-digit wage increases for 600,000 people, and the Hungarian New Deal. However, he warned that there is not, has not been, and will not be a budget capable of correcting and resolving in a single year all previous problems, inherited burdens, indebtedness, and misguided economic policies.
He noted that there will always be those for whom “a half-full glass is half empty,” but a governing cycle consists of four years for a reason, and his responsibility as Prime Minister is to be able to look Hungarian people in the eye next year and in 2030, and say that “even if not everything was perfect, together we did what the homeland required of us.”
Péter Magyar accused the previous government of having “promised the moon and lied through its teeth” in 2021, embarking on handouts without any financial backing. In his view, the former cabinet distributed 1,500 billion forints among the people, which caused the budget deficit and national debt to spiral out of control. He added that after the former government secured a two-thirds mandate in the 2022 election, it took back 2,000 billion forints from the people that same year. The first year of the last Orbán government brought austerity measures, tax hikes, new taxes, the abolition of tax breaks, and a narrowing of the utility cost reduction scheme, said Péter Magyar, who argued that the same would have happened in 2026 and 2027 had Fidesz-KDNP won the election.
Speaking about the income tax exemption for mothers between the ages of 40 and 50 with two children, he stressed that “zero funding was budgeted” for this measure in the 2026 and 2027 budgets, even though it would have cost more than 200 billion forints next year and more than 600 billion forints by 2030. He put it this way: Tisza is not taking away something that already existed and was properly funded — rather, it is not introducing something that had no funding or basis in reality whatsoever.
He believed that had Viktor Orbán returned to government in 2026, he would not only have failed to introduce this measure, but would also have cut “existing provisions” and again taken trillions from people. In Péter Magyar’s assessment, the introduction of a one-million-forint cap on the personal income tax exemption for mothers also serves the cause of fairness, with the aim of preventing a situation where those earning several million forints pay no tax.
He stressed that in the case of mothers with two children, the family tax allowance would remain in place and the family allowance would also be doubled. In his view, this means that a woman over 40 with two children earning a gross salary of 800,000 forints would end up with the same net wage as if the Orbán government’s unfunded promise of a personal income tax exemption had been introduced. He added, however, that at a higher salary — for example, one million forints — there would be some degree of reduction.
Péter Magyar said it was more important that significantly more would be spent in 2027 on support for families, and stated that 1.7 million children would be better off than if “the nightmare of Viktor Orbán’s party still governing had come true in 2027.”
On the subject of wage increases, he said he hears and sees the dissatisfaction of the trade unions, and that he too would wish for higher wage increases, but that a sustainable budget also requires that “the country stretches only as far as its blanket reaches.”
The state — the central public administration and state-owned enterprises — must also cut costs internally, so that double-digit pay rises not seen in some sectors for decades, along with tax reductions, can be achieved, he explained.
Péter Magyar said that pay rises “must be viewed” in the context of this year’s inflation rate of 1.6 percent and next year’s expected rate of 3 percent. This is a “very, very robust pay rise,” he said, adding that they are aware of how far behind these sectors had fallen in previous years, and of how the previous government — primarily the Ministry of Interior, as the sectors affected by the pay rises fell under its remit — had left people to fend for themselves.
He stated that it is neither fair nor just to expect a budget or a government to fully resolve the mistakes of the previous 15 to 20 years within a single year while simultaneously creating a sustainable budget.
He indicated that they are projecting a declining deficit, which means that as early as next year they will be able to save hundreds of billions on financing the national debt, rising to the order of thousands of billions by the end of the cycle, and that this money can then be directed toward pay rises.
On the reduction of personal income tax, Péter Magyar said that Viktor Orbán had promised single-digit personal income tax in 2013, but that it would be the Tisza government that delivers on this commitment — 13 to 14 years later — in line with its own pledge.
The prime minister blamed the governments of the previous two decades — the “Gyurcsány–Bajnai–Orbán holy trinity” — for the decline in pensions, while in his view the current commitment of a Tisza government would deliver more money to millions of Hungarian pensioners. He added that during the Orbán governments, the purchasing power of pensions had fallen, and that had the previous government remained in office, it would have “impoverished Hungarian pensioners even further.”
State support for sport will not change next year, but the corrupt system of tax-benefit incentives will be abolished and replaced by a transparent, equality-based funding model, the prime minister announced. He promised that state-owned companies would break with the existing practice of providing sponsorship money at political direction. He acknowledged that the departure of NER-affiliated companies from certain sports clubs could create difficult situations, which the government would seek to manage, and that the system would need to adapt to the new circumstances.
It is not true that the new government is abolishing the Otthon Start Programme and replacing it with nothing, he stated, emphasising that they had developed a housing and renovation programme that is far more favourable and helps more people. Among its elements he listed the Wekerle Plus scheme and the home savings programme, which, he added, the previous government had also “axed.” He stressed that interest rates are already falling, but the goal would be to bring them down to three percent, at which point supporting young people’s housing needs, for example, would cost the budget considerably less.
Péter Magyar referred to the previous government as the government of international capitalists, multinational companies, and banks. He stated that while the previous government had campaigned for years at public expense on the claim that it was working for wage earners and helping pensioners, Hungarian pensions had in reality lost their value and the country had the highest inflation in Europe. The tax payments of multinationals had revealed, however, that Viktor Orbán’s government had been the government of international capitalists, multinational companies, and banks — he stressed, adding that these companies and financial institutions had been taxed at the lowest rates.
This will change, he declared, continuing that they would like large companies — whose operations as employers are important in Hungary — to pay tax at a rate close to at least the global minimum tax. Their effective tax rate will still not reach 15 percent even then, despite that figure being enshrined in legislation, since various items can be written off, but they will at least be paying 11 percent rather than 6–7 percent, he argued.
He stated it was no coincidence that the stock prices of energy companies and banks were “through the roof,” because under the previous government they had not paid that much in windfall taxes, or if they had, they had received the money back — for example through highly subsidised state loans and interest margins. He said that now they were closing the loopholes. In response to another question, he indicated that the government has the option, through consumer protection or other regulatory tools, to monitor that banks or other companies do not pass the windfall taxes on to consumers.
When asked about the abolition of county assemblies, the prime minister was unable to give a precise date. He added that, as much as it should not be the case, county assemblies — which he described as political patronage vehicles — still appear in the budget. He stated that they hope to pass the necessary legislative amendments this year, and that consultations with the local government sector are also underway. He indicated that county councils have certain responsibilities — settlement development, road network development, the assessment of certain EU grant applications — that need to be transferred elsewhere, whether at the district level, the local level, or within ministries. The counties will remain; it is only the political patronage vehicles that are no longer needed, he said.
Regarding the introduction of the euro, Péter Magyar indicated that he is very ambitious on the matter and believes that joining the eurozone as soon as possible would be important for the sake of citizens, businesses, price stability, and predictability. But this is not a decision that needs to be made right now, he said. In response to further questions, the prime minister also spoke about the fact that the budget is calculated on an exchange rate of 364 forints to the euro, and that the announced net wage increases already include the tax cuts.
The government expects efficiency improvements from every actor in the public sector, Péter Magyar told MTI. He also stated that, while there is no official staffing freeze in the ministries, vacant positions are not being filled, and the ministries are also taking care to ensure that personnel expenditure does not increase.
He also stated that diligence and very strict budgetary policy are expected in the public sector. He added that the wage bill must not increase at state-owned companies either.
There are state-owned companies where the average salary is “shockingly high,” he declared. He said that from the perspective of a sustainable budget, this is certainly not right, and since there are very many such state-owned companies and very many bodies with national jurisdiction, this needs to change. He noted that at state-owned companies, several hundred people work who earn more than the prime minister.
He indicated that there will be state-owned companies where there will be no pay rise or only a minimal one, and there will be others where management decides that in “unnecessarily bloated organisations,” it can deliver more significant pay rises for employees through restructuring and redundancies. “We expect very strict discipline from ministerial leaders and from the heads of state-owned companies as well,” he summarised.
Artificial intelligence was used for the translation of parts of the original Hungarian text.