Hungarian economic model successful: PM

Hungarian Prime Minister Viktor Orban said on Monday the Hungarian economic model was a success.

Speaking on public radio, Viktor Orban said the minimum wage could be increased significantly and corporate taxes reduced.

The government was in negotiations with the private sector to increase the minimum wage of unskilled workers by 15 percent and the minimum wage for skilled jobs by 25 percent.

The current minimum wage is 111,000 forints per month (about 382 dollars) and the higher minimum is 128,000 forints.

Orban also spoke of reducing the corporate taxes to nine percent, which would make it the lowest tax in the region and hopefully attract international businesses.

He said the wage hikes and tax reductions were part of a six year economic plan he and national economy minister Mihaly Varga were in the process of designing.

He acknowledged that businesses were balking at the wage hike because of high payroll taxes and social security contributions, and said that the new plan would include reductions in the payroll tax.

If negotiations with employers are fruitful, Orban said, pensions for retirees could be increased by 1.6 percent in 2017 as opposed to the 0.9 percent currently envisaged.

In all, Orban said, his government was hoping to be able to raise real wages by 40 percent in coming years, depending on improvements in economic performance that would keep government income high despite reduced tax rates.

He noted that the number of taxpayers in Hungary had increased from 1.8 million in 2010 to 4.3 million in 2016, and that 2010 lack of jobs has shifted to a labor shortage in 2016. "We are very close to achieving full employment," Orban said. Enditem