Hungary Opposition Alliance Seek Industry-Tax Phasing Out

Hungary’s opposition alliance, trailing Prime Minister Viktor Orban’s party ahead of an April election, agreed to phase out or overturn a spate of government measures including extraordinary industry taxes if they win.

Reinstating a two-round election procedure, which Orban scrapped, as well as removing curbs to the Constitutional Court’s jurisdiction put in place by his Fidesz party, are also part of the common program, Attila Mesterhazy, the head of the Socialist Party and the alliance’s prime minister-candidate, said on his website today.

Orban, whose Fidesz leads all opinion polls ahead of the April 6 ballot, has consolidated his power using his two-thirds parliamentary majority, extending influence over independent institutions including the courts, media regulator, central bank and election authority. The opposition has said the changes to voting rules included gerrymandering in some election districts aimed at reducing their chances of winning.

“We pledge to rebuild the constitutional state, including a democracy based on the system of checks and balances,” the opposition alliance said in a statement.

Mesterhazy’s Socialist Party is joined by former prime ministers Gordon Bajnai’s Egyutt-PM, ex-premier Ferenc Gyurcsany’s Demokratikus Koalicio party, and former finance minister Lajos Bokros’s Modern Magyarorszag Mozgalom.

Fidesz had 30 percent support among eligible voters in February, compared with 23 percent for the opposition union known as Osszefogas, or alliance, and 36 percent who said they were undecided, according to a Feb. 1-9 Ipsos poll that had a margin of error of 2.5 percent.

Orban has relied on extraordinary industry levies, including a bank tax, to reduce the budget deficit below the European Union ceiling of 3 percent of economic output. He has also used it to compensate for a drop in personal income-tax revenue after the introduction of a flat 16 percent rate.

The government has called the industry taxes a “fair sharing” of the burden, while the opposition alliance today called them “penalizing and predatory.”

The extraordinary taxes contributed to a plunge in private investment and lending and have rendered the economy’s growth potential “worryingly low,” the Organization for Economic Cooperation and Development said in a Jan. 27 report.

The economy grew 2.7 percent in the fourth quarter of last year, the most since 2006, as agriculture, industrial production and construction drove expansion, the statistics office said on Feb. 14 in a preliminary estimate.

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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