The budget is almost in ruins, yet thousands of billions go to support state companies – KecsUP

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The government regrouped HUF 2,000 billion in subsidies to state-owned companies, a significant part of which was already paid in small amounts. At the same time, in recent days, it was decided to postpone HUF 675 billion in investments in order to be able to meet the increased budget deficit target for 2024.

Eight of the ten largest recipients of subsidies awarded at the expense of the budget are state companies. The other two are the Ministry of Construction and Transport, which will receive HUF 224.8 billion for railway renovations, and the municipality of Nyíregyháza, which will receive HUF 132 billion extra for the development of the Nyíregyháza Industrial Park’s water utility network. This is practically a disguised investment subsidy, because the public money can be linked to the investment in the Chinese battery factory planned in the county seat of Szabolcs.

By 2023, European energy prices have practically normalized, yet MVM CEEnergy (formerly Hungarian Electric Works) received 348.6 billion forints to support the reduction of overheads, based on a unique government decision. While MVM absorbed more than HUF 1,000 billion in subsidies last year, when it was needed in November 2023, it paid HUF 309 billion in extraordinary dividend payments back to the state.

The MÁV group receives HUF 710 billion in various titles, which corresponds to nearly one percent of the entire Hungarian GDP. Most of the money goes to operations, while a smaller part goes to development: only HUF 206 billion will be spent on state compensation for lost fare discounts, an additional HUF 207 billion will be allocated to the maintenance of the railway network, but HUF 111.2 billion is also planned for the renovation of the Budapest-Belgrade railway line.

Hungaroring Zrt. will receive HUF 110 billion, because the company that operates the Formula 1 track in Mogyoród has started a large-scale track renovation with public funds. By the way, the organization of Formula 1 races costs taxpayers almost HUF 20 billion per year. There is no public impact study on whether the one hundred billion renovation of the Mogyoród track will ever pay off.

HUF 101 billion will go to support the state-owned Mavir Zrt., which operates the national high-voltage network. This money was not received for network development, but for the support of district heating companies – according to data from the MÁK Public Finance Portal.

Some of the subsidies can be questioned not only in a normal budget period, but even more so in a year when the budget collapsed already at the end of the second month, and in the first three months of the year the deficit of the public finances exceeded HUF 2,321 billion, which is the amount authorized for the whole year 93 percent. One of the reasons for the shortage was the huge demand for support from state-owned companies.

via Népszava

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