FACTBOX-What we know about incoming Hungary govt plans

May 14 (BestGrowthStock) – Centre-right Fidesz party is expected to
form Hungary’s new government by the end of this month after it
won elections in April.

For Friday’s story on the inaugural session of parliament
click here [ID:nLDE64D12D]

Following are Fidesz’ policy plans made public so far:

TAX PLANS

* Tax cuts worth at least 1,500-2,000 billion Hungarian
forints ($6.92 – $9.23 billion) in the next three years starting
from July 1, 2010 as part of plans to simulate growth and
investment, which also includes state support to domestic
businesses. [ID:nLDE64517L]

* Family tax as of Jan. 1, 2011 as part of a three-year tax
reform programme which economy minister designate Gyorgy
Matolcsy has said would amount to a “tax revolution”.

* Simplification of the tax system

* No reduction in top 25 percent value added tax rate

* Shifting tax burden from incomes to consumption

* No wealth tax planned

COST SAVINGS PLAN

* To save about 800 billion forints by reducing bureaucracy
over the next four years. No layoffs in public sector this year.

* To reduce the size of parliament from 2014, and halve the
number of representatives on local councils this year

FX LOANS

* Conversion of foreign exchange loans: govt government to
establish a state-backed fund allowing troubled household
borrowers to convert their foreign currency (Read more about trading foreign currency. mortgages into
forints to reduce risks from market volatility.

Costs of conversion should be shared among the state, the
banks and the borrowers.

BUDGET DEFICIT

* Plans to agree with the IMF and EU on a budget deficit of
5-6 percent of GDP this year, higher than the outgoing Socialist
government’s 3.8 percent target. No detail on next year’s budget
but plans to cut the deficit by 0.5-1 percentage point of GDP
per year in the coming years.

* Multi-year plan to reduce debt (no details available)

EURO

* No rush to adopt the euro, as the euro zone struggles with
grave problems

CENTRAL BANK

* Puts pressure on central bank, says it had made serious
policy mistakes over past years and Governor Andras Simor, and
also the Monetary Council members should resign. [ID:nLDE64A0D5]

Matolcsy also said the heads of the financial regulator
PSZAF and the tax authority should also resign.

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(Reporting by Krisztina Than; Editing by Maria Golovnina)

FACTBOX-What we know about incoming Hungary govt plans