Prime Minister Mandates 5% Savings for State-Owned Companies
Hungary’s Prime Minister, Viktor Orbán, has issued a decree to cut state company expenses by 5% this year, with a focus on reducing personnel costs, according to a report by Index.
The objective of this directive is to encourage responsible management of state assets, improve the efficiency of central budget resources, and streamline the operations of state-owned enterprises. This decision comes as a response to the economic effects of the Russian-Ukrainian conflict and its impact on Hungary.
Under the decree, all 100% state-owned companies, whether directly or indirectly owned by the state, are required to achieve savings equivalent to 5% of their personnel expenses for a period of four months, based on the previous year’s financial statements.
While this measure is mandatory for most state-owned entities, exceptions may be considered for companies specifically under government ownership. However, the overall savings target for companies falling within the relevant budget category must still be met.
The regulation also states that any company failing to meet the required savings this year will be required to save double the remaining amount in the following year. This rule applies to companies established before the enactment of the regulation and fully owned by the state, excluding entities such as the Hungarian National Bank, companies of the Office of the National Assembly, and major firms like Volánbusz, MÁV, Magyar Posta, and MVM.
The Government Control Office will be responsible for overseeing and ensuring compliance with these savings requirements.
This move reflects the government’s efforts to manage financial resources efficiently and navigate the economic challenges posed by the ongoing conflict in the region.
[Via Index; Featured Image: Pexels]
