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Zsolt Törőcsik: In his annual State of the Nation address last Saturday, Viktor Orbán declared this to be a year of breakthroughs. The Prime Minister has announced a series of economic and political measures, including lifelong tax exemption for mothers of two and three children, and a VAT refund for pensioners. In the next few minutes I’ll be asking Prime Minister Viktor Orbán about the details of these measures. Good morning.
Good morning.
Before we get to the specifics, let’s talk a little about the fact that these are very wide-ranging measures that cover many areas of life. What do they have in common? What’s the chain of logic that can be said to link them all?
Two such organising principles can be identified. The first is that they all have a common precondition, called peace. So they cannot be done in wartime. I think that in peace they can be done – the future will decide, but they certainly can’t be done in war. So in the three years that we’ve been here we haven’t even been able to consider breakthrough changes and unprecedented measures that are a world sensation, such as the decisions on family support. So the first thing is peace. Now, of course, you may say – but please be polite and don’t say it – that there is no peace. And this is true in the sense that there are still very serious, painful, bloody battles on the front line; but everyone feels that peace is within reach, and it is clear that the war won’t escalate. So, even if the war continues, today the chances of it reaching us here are almost zero. This is because the United States is on the side of peace. If I didn’t sound immodest, we could say that it has sided with us. I could say that, but we’re talking about an elephant, so let’s talk about it siding with peace, and let’s say with Hungary and the Vatican. From this point on, the danger that existed – that the war would spread and stampede the Western world, with America at the forefront, into it – has passed. So for the first time I feel that it’s really possible to organise our economic policy according to the logic of peace. So this is the first. The second organising principle that links our actions together is that they’re broad-ranging and fundamentally family-centred decisions. With all these changes the question is what we consider to be the most important thing in the world. And the most important thing in the world is family. All these many measures, basically tax system changes, are based on this simple proposition: the most important thing in the world is family. So they let us help families to be strong, to stay together, to have children, for children to be born, to raise children, to ensure that those who have children shouldn’t be worse off financially than those who don’t have children. Of course there’s freedom, so those who don’t commit to having children don’t need to; but those who do have children should feel that they’re playing an important and valuable – even vital – role in the future of our nation and our community. So this family logic is the other principle around which we can organise the many measures that might otherwise be unconnected.
If we talk about the specifics, there’s personal income tax exemption for mothers of three children, and then two children. The precedent for this already exists for other groups. Why did the Government continue with tax cuts in this direction?
Let’s look at the considerations underlying the Hungarian tax system. The first consideration is that if there is work, there is everything. But if there is no work, there is usually only suffering, misery, poverty and woes. So back in 2010 the first step in the reform of the tax system followed the logic of helping people to get work. Many people don’t remember it now, but when we said there were going to be a million jobs in ten years we were laughed at, mocked, and I was targeted with all kinds of jokes about how it was impossible. But it turned out that it was possible. So the first thing is that you have to respect work. Secondly, you have to realise that work is the only thing on which you can build the future of a community. The second important thing is that if there aren’t enough children being born, and if people who have children feel that those with children are being punished by the system rather than helped by it, then there won’t be strong families. You cannot have a strong country without strong families. That’s the second idea. Let everyone have a job and let our families be strong. And then we introduced the tax credit for parents. There had never been anything like that. Because before, philosophically the approach was that there are rich people and poor people, regardless of whether or not they have families. And there was only one principle: we’d try to somehow help those who are poorer. This was an understandable, socially-based approach. It shouldn’t be discarded, but another principle should be added to it: that after all the most important thing is whether or not there are children. This is what really creates distinctions between people, this is what distinguishes their life situations from one another. And this needs to be somehow reflected in the tax system. So we’ve kept the family allowance, we haven’t abolished it, but we’ve put all the available money into child tax credit, because that’s where the two principles come together: work and having children. By the way, many families who previously thought that it was sensible to settle down and have a family, to have children and still be able to make ends meet without working, have come back into the labour market. Incidentally, it used to be common for very many Roma families – hundreds of thousands of people – to have no jobs, but to live on the benefits they received for their children. Now we’ve said that you can live on the money you receive in relation to your children – but you just have to work for it first, and receive it in tax credits. So this was the system. And it’s brought people in – it’s brought a million people into the Hungarian economy. This was the first step. Then we tried to introduce measures that helped young people. So if you’re under 25, you don’t pay personal income tax. You can have more money, you can get started, get on your own feet and have an independent life. Then we introduced a regulation which stipulated that women under 30 with at least one child won’t pay personal income tax. Then there was a little more financial leeway, and we introduced a regulation stating that working mothers of four won’t pay personal income tax for the rest of their lives – even if their sons or daughters are grown up. We had the money and the strength to do this. Then COVID crashed in, then the war crashed in, and at that point we came to a standstill. During the war the task was quite simply different: it was a war economy. We’re lucky we survived that and got to this point. And now that the war is over and the economy is strong, there are resources that can be used – because 4.7 million people are in work, and that’s where our strength comes from. And the question was this: “For what?” I think that the most important thing is to go ahead and fulfil our family policy aims, and to double the tax credit for parents of young children – because in the meantime we’ve had war, inflation, sanctions, everything, and that tax credit has lost much of its value. And so now we’re doubling it. We can do this in two stages: on 1 July this year, and on 1 January next year. This means that those with one child will receive 20,000 forints, those with two children will be able to deduct 80,000 forints from their tax, and those with three children will be able to deduct 200,000 forints. This is a major action plan. And then there’s another. We said that we have even more power than this, so let’s call it a breakthrough, let’s achieve the following: those who have three children will pay no income tax from October this year until the end of their lives; those who have two children and are under 40 will pay no income tax from 1 January; from 1 January the following year it will be the turn of those who are between 40 and 50; and then we will go up like that until we reach the retirement age – or even beyond the retirement age. And then in four years we’ll have a tax system which is unique in the world, with families at the heart of it. In the context of tax the term “tax haven” is often used. It’s where one avoids paying tax where one doesn’t pay tax. Now Hungary will be a tax haven – a family tax haven – and young people will have an opportunity to choose a family-centred life path. So I think that if this system is fully implemented, we’ll see girls being born who, when they eventually reach adulthood and their working years, won’t pay income tax; and when they leave their working years as pensioners they won’t have paid any income tax. So they won’t be faced with paying income tax at any point in their whole lives. There will be millions of them. There’s nothing like this anywhere in the whole world! This is a completely new approach. I’m not in the habit of giving advice to others, but if the Western world wants to solve its problems not by immigration and migration, but through its own efforts and its own families, then it needs to switch to this kind of thinking. This is what Hungary is trying to do.
Let’s stay on this subject for another short question, because many critics say that this will blow a huge hole in the budget, and that the whole programme isn’t feasible. Where will the money come from?
It really does affect a lot of people, and we’re talking about a huge amount of money. Here I’ll try not to make a mistake when I list the figures. So from 1 January, the women joining the system must be under the age of 40 and have two children. And if I remember correctly that’s 120,000 citizens. In this country there could be between 230,000 and 240,000 mothers of three. So these numbers are in the hundreds of thousands. And in 2027, when mothers of two aged between 40 and 50 enter the tax-free world, that will be 230,000 mothers. And then again the following year. So indeed, the critics are right to say that the Hungarian government has made a huge commitment. And this isn’t easy to achieve financially – so they’re right about that too. It’s just that, since they’re analysts, they don’t know how it could happen: they think that the reality is the risk on paper. No, reality is what we do. And over the last fifteen years I’ve “grown up” doing all the things that they said we couldn’t do. For example, we’ve halved personal income tax. But people don’t remember that. Well, here the middle class paid 35 per cent tax. And the Left, if they came back, would again make the middle class pay 35 per cent tax – while today they pay 15 per cent. And we introduced the public works scheme, and raised the minimum wage. We’ve done a lot of things that people said weren’t possible, but it turned out that they were. So I’m not deterred by these criticisms. And while I don’t want to promote conspiracy theories, if the economy’s doing well and there’s money, I think it’s right to ask where it goes. And I understand that the financiers and the multinationals want it to go to them. Painfully for them, if it’s up to us it won’t go to them, but to families. Now, back to the task at hand: this is a financial task of great magnitude, because we have to reduce the budget deficit and government debt – which requires full commitment. In addition to the economy having to produce what’s needed, this will ultimately depend on two people. It depends on all of us, but at the level of leadership it really depends on two people: the Prime Minister and the Minister for National Economy. It’s a matter of such gravity that the Prime Minister personally has to continuously oversee it, keep it in order and fight to make it happen; and the Minister for National Economy has to bring to bear the expertise on how to skilfully manage the other budget chapters in order to make this family support policy happen. This presents us with a fine task for many years, but at the end of the day this is why people employ us.
Now, these measures will be in vain if part of their result is taken away by inflation – which has accelerated from 3.7 per cent in November to 5.5 per cent in January. In response to this, you’ve also raised the prospect of reintroducing price freezes. What will it take to avoid this? Because earlier you yourself said that in essence that measure isn’t a good one.
Well, the first thing to do is to put the hocus-pocus behind us. So it’s all very well to theorise about inflation, yes; and there are macroeconomic ramifications, yes, so let’s read what economists write about it. But there are simple questions here. And since after all we’re a party of the people, we don’t like to overcomplicate things, and we take a commonsense approach. The question I put to myself and to the members of the Government was this: “Look, farmers who keep animals produce milk and sell it for 200 forints. I go to the shop, and it’s 550. So tell me, how’s this possible? What’s caused it?” And if the difference is so big, why do we have to increase it by 30 per cent at the beginning of the year? So in one year it goes up by 30 per cent! It’s the same for eggs. I know how much they cost. How can the price in the shop be three times as much? Who raises it, why, and where’s the profit? So let’s ask these questions! Let’s drop all this babble about inflation, or rather let’s leave it to the intellectual economists – that’s right, let them deal with it, they’re important insights. But those whose job it is to take action and protect people from inflation and price rises should ask why prices are being raised, by whom, and where the money’s going. What’s the reason for this? What needs to be done? Where can I help either the trader, the producer or the processor? Where can I, as head of the Government, help them to reduce their costs so that they don’t have to raise their prices? And how can I get them to stop raising prices by such a high percentage? Because during the war I understand it. I’m not happy about the fact that there’s a war, inflation, that energy prices are going up, and that then prices go up. But the war’s over, there’s peace now, so why did they raise prices so much? So these are the questions we need to find clear answers to. This is why we haven’t kicked the door down: we’ve said to the Minister for National Economy, “Sit down with them, please, Minister, tell them not to do this. Or let them explain where the money is. How does milk bought at 200 forints become 550 forints in the shop? And let’s negotiate, and let’s all be moderate. Don’t try to make people rich now, when we’re coming out of a period of war.” So we’re asking for moderation, and if we can’t get it in a nice way, we’ll ask for a plan of action from the Minister for National Economy on how to force those increasing prices not to raise them so much. We shall see. It’s a big fight, and it will take a long time. And then we have a separate group to deal with. These are the pensioners: our parents, the parents of my generation, who are even more affected, because wages are rising, but pensions can never rise as much as wages. Higher wages help people and families to cope with price rises, but pensioners aren’t really able to benefit from this method of protection. Of course the law states that pensions will increase in line with inflation; but while such a rapid increase is in progress, it will be a drain on pensioners. So this is where help and intervention are needed. We’ve devised a system related to basic foodstuffs for which we haven’t yet reduced VAT to 5 per cent. We won’t reduce the rate on them now, we won’t cut VAT, because in that case about two-thirds of the price reduction would stay with the retailer and only one-third would reach the consumer. So we’re choosing a method whereby the VAT reduction will go entirely to the pensioner. We can do this by selecting a few important products for which VAT is higher than 5 per cent and giving VAT refunds in the simplest possible way. Now the Minister for National Economy will work this out, intellectually, on paper: we’ll know how to do it, but it will need some work before this can be translated into reality. We can expect this in the second half of the year. We’re thinking of a reimbursement amount of about ten to fifteen thousand forints per month. The budget will be able to cope with this.
In addition to economic questions, in your annual State of the Nation address you also talked about a political breakthrough. And this week it was revealed that MEP András László will be responsible for investigating the Hungarian aspects of the USAID affair. What do you expect him to investigate?
When we talk about a breakthrough, we’re talking about an economic breakthrough in 2025 and a political breakthrough. In the political world, this means three things. The first – in terms of priority, I think – is the following. This is what you’re talking about: to urgently, to swiftly, continue the work begun by American leaders Donald Trump and Elon Musk. Because they’re the ones who have exposed this whole big left-wing international network, and have shone a light into this dark corner, which is essentially a big corruption issue on a global scale – or at least across the whole of the Western world. This has been about giving money to people, organisations, media, to get certain opinions across to the people – opinions that the people who gave the money expected to be given. They bought them. I’m sorry, I don’t want to defame your profession, but they bought journalists, they bought media in order to write what they – the people who gave the money – think about the world. And they sold all this as independence, tolerance, sensitisation. The things that we’ve been advised by you, by a section of the journalism profession, and by these fake civil society organisations, are terrible: that migration, for example, is good, and we must let them in; or that it’s a good thing to expose children of school age to all sorts of gender activists’ explanations of the world; or that the war, for example, is a good thing. And so that the whip wouldn’t always be cracking on your backs, on journalists’ backs, they paid Hollywood stars to go to Kiev/Kyiv. They paid them millions of dollars because they believe that the war is just, the war is good, and it must continue. So that’s what happened. These tentacles, which reached as far as Hungary, must be cut off. So the first breakthrough will be to gather all the information, and it will be the job of the Government Commissioner to gather that information. On the basis of this information we’ll take action at home and create the necessary legislation, because Hungary isn’t prepared for this kind of self-defence: there are gaps here, the conditions aren’t yet in place for Hungarian sovereignty and for Hungarian public life that’s free of influence, and these conditions need to be created and then acted on. The second major issue on which I’d like to achieve a breakthrough is a very serious problem, basically a phenomenon in small rural communities: the rapid and invasive spread of new kinds of drugs, which are used to turn our children into wrecks and ultimately to kill them. And we must talk straight with the drug dealers. Because what we’re talking about here, dear drug dealers, is that you make your living and your money by poisoning our children. You have no right to do this, and if you continue, you’ll be punished very severely: you’ll be punished so severely, you’ll be hit so hard that your ears will be blown off. This is why I won’t mince my words: on 1 March we’ll very simply be launching a manhunt for drug dealers. This will even require a clause in the Constitution stating that drug use in Hungary is a punishable offence. The police must be strengthened, action teams must be set up, and a major series of actions must be taken to simply cleanse the country of these concoctions, these new kinds of designer drugs – which, I repeat, are no longer part of the lifestyle of well-off, well-heeled high school and college students, but are now down there in the countryside, in the world of the poorest, most vulnerable people. This is too much, it’s insupportable! This is the second. And the third thing is that child protection must be implemented not only through the tax system, but also in other areas of child protection linked to children’s upbringing. Put simply, this is called “Pride”. So there will be no more of that, it will be over. It shouldn’t have existed earlier, but it did, because the US Ambassador led the march, which clearly showed that the world’s great powers support it. We had only as much power as we had, but now the world has changed, and the Americans have called these types of ambassadors back home. The American Ambassador won’t be leading a Pride march, from which it’s clear that it won’t have international protection. We’ll deal with this under our own legal system, and there will be no such thing, because it runs counter to enabling our children to develop in a healthy, balanced way, according to their parents’ wishes. Here, too, we must show strength. These are the three big areas: child protection, drugs and the eradication of political and media corruption in Hungary.
One other thing he mentioned in relation to child protection is that it should be written into the Constitution that there are two sexes: male and female. How does this relate to child protection?
I’m not sure that everyone in Hungary understands this, because here we live in a normal world. I don’t think that madness has been unleashed here; there have been attempts to do so, but it hasn’t been unleashed yet. Here, if you ask someone on the street or at work what they think humanity looks like, they’ll say that there are men and there are women. Well, this is Hungary. But at the same time we’re under enormous pressure from the Western world to declare that this is obsolete. For example, if you’re asked this question in Germany, you cannot answer it like that. Because the answer will be that this conception of people and understanding of society based on the binary notion of men and women is at an end, because people can be like this or that, and there are all sorts of variations among them. There are countries where sixty categories have been set up, which are neither man nor woman. Sometimes fun is made of this, but at the same time the idea is propagated that the world shouldn’t be seen as comprising men and women – and therefore, Dear Zsolt, for you there’s not only the option of being a man or a perhaps a woman, but there are other options as well. So this kind of school education, filling our children’s heads with such nonsense, is unacceptable. Or at least I, as a parent, certainly wouldn’t agree to it. So parents must be given the right to defend themselves against this. And Hungary should do what Hungary has always done, since the world began. Hungary has always thought that the world is one in which some are born male, some are born female. And even if someone wants to change this, which is another debate, one thing is certain: there’s change from one thing to something else, but there’s no third, fourth or fifth option. In the meantime, industries have been built around this, theories are being taught, there are gender departments in universities across the Western world, all kinds of medical treatments are being recommended for teenage children, and they’re gradually making it a teenager’s, a child’s, right for there to be intervention in their development as their own biological sex. I don’t think that this is acceptable in Hungary, and it runs completely counter to the logic and value of protecting children. So here too we have work to do. But we’re much better protected, because things haven’t yet deteriorated to the extent that they have in many Western European countries.
Let’s talk briefly about one more issue, because next week there will be an extraordinary EU summit on support for Ukraine: on Ukraine’s possible accession to the European Union. The President of the European Council was here this week for discussions on preparations for the summit. What is Hungary’s position on this issue, and how much discussion can we expect on Ukraine’s accession to the EU?
This isn’t a complicated question. Some are for it and some are against it. I, for one, am against it. I wouldn’t dare to say, “always and forever” or “never”, because who knows what history will bring? No one but God knows that. But one thing I can say for sure is that here and now it’s unthinkable. It would destroy us. In the first place, it would destroy Hungarian farmers and Hungarian agriculture; and in the second place, it would destroy the entire Hungarian national economy. And I don’t even clearly see how we’d control the crime that would flow into Hungary with it. From the viewpoint of Hungarian interests I can’t give a single argument that would justify Ukraine’s accession – and I can give you plenty of arguments against admitting Ukraine. This is where we are now.
I’ve been asking Prime Minister Viktor Orbán questions on topics including the economic measures announced last week, action against drug dealers, and the chances of Ukraine joining the EU.
