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2019-02-25
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Hungary's Pursuit of Baby Boom with Economic Incentive rather than Immigration

¡iĶ¤å¡jIn response to the falling birth rates in many countries in Central Europe and the decline in labor force as a result, some people suggested importing immigrants to maintain population growth.

Yet, the right-wing Prime Minister of Hungary Viktor Orban opposed immigration and announced a number of measures in his state of the nation address recently to boost the number of babies being born.

The government's plan included exempting women with four children or more from paying income taxes for life, granting huge subsidies for the purchase of new 7-seat cars for families with at least three children, and providing young couples under 40 with low-interest loans equivalent to HK$280,000 and the loans would not have to be paid back after giving birth to three children. Orban emphasized that it was the way of defending Hungary's future without depending on immigration.

The fertility rate of Hungary is 1.45, i.e. the average number of children a Hungarian woman will have in her lifetime is only 1.45, which is much lower than the EU ¡]European Union¡^ average of 1.58. In addition, a significant amount of Hungarians have moved to western Europe in the past decades, leading to a decline of population by 32,000 per year and consequently a decrease in labor force.

In order to increase manpower to cater for companies' operations, the Hungarian parliament had passed the so-called "slave law" in December last year, allowing employers to require workers to work overtime up to a maximum of 400 hours annually, which had resulted in large-scale protests nationwide. The newly proposed measures of Orban's administration were considered as a response to the demonstrations.

According to the plan, Hungarian women with four children or more would be exempted for life from the payment of personal income taxes; women under 40 would be offered low-interest loans of 10 million forints ¡]approximately HK$279,000¡^ after their first marriage, to be exempted from paying back one-third of the loans once the couples gave birth to two children, and entirely cancelled for three children; the government would also increase the housing allowance for families with two children or above and would give 2.5 million forints ¡]approximately HK$69,400¡^ as non-refundable grants for the purchase of new 7-seat cars for families with at least three children.

Orban said the birth rate in Europe was falling and the West relied heavily on immigration to deal with the issue and they wanted as many immigrants as possible. "We Hungarians have a different way of thinking", he said. "Instead of just numbers, we want Hungarian children. Migration for us is surrender."

Orban hoped that through the new policies, the country would not have to rely on immigrants to stimulate population growth and stressed that the initiative was meant to ensure the survival of the Hungarian nation. He also called for voting in the European Parliament election in May in hope of rejecting the continuous importation of immigrants, defending the European nations, families and religions, and preventing Christians in traditional European countries from becoming the minority.

The Prime Minister also introduced a number of measures to boost the economy, including creating 21,000 nursery places over the next 3 years, and spending an extra US$2.5 billion ¡]approximately HK$19.6 billion¡^ to improve the country's healthcare system. Yet, the government did not disclose the estimated costs of the new measures but Orban's chief of staff said the government might set aside budgets from the fiscal reserves or the fiscal surplus this year to support the relevant expenditures.

Hungary Central Bank estimated that the local economic growth rate this year would be 3.5% only, which was significantly slower than the previous 4.7% last year. When Orban was delivering his state of the nation address, around 2,000 people gathered in front of the Prime Minister's office against his policies and urged him to improve governance, as well as criticized the authority for fining the opposition in an attempt to ban their participation in the European Parliament elections.¡½Ãe¹Å»ö

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