Good morning, Ladies and Gentlemen,
I respectfully welcome the new members. Let us preserve fond memories of Professor Gazsó. We have much to thank him for. I personally also owe him much, because I was still at university when I was able to hear his first sociology lectures – although not officially, but at university society and club events. These showed us a world which was completely different from that depicted in the officially sanctioned version. While he remained on the Left – also in a party political sense, as far as I remember – he always based his position on reality and truth. He was a good fighter, and helped a great deal – not only the elderly, but also almost every government that was formed after 1990.
Ladies and Gentlemen,
As you are no doubt aware, in April there was a parliamentary election. Please allow me to use this as the starting point for our meeting today. First of all, I would like to thank those older persons who voted in the election. It is widely known that in Hungary, for some mysterious reason – we don’t quite understand why – the percentage of older citizens voting in elections is always higher than that of young people. This is probably related to a sense of responsibility, and while we did not gather here to criticise young people, it is undoubtedly true that – if elections do reflect something like this, which I believe they do – the sense of responsibility among older people is stronger or more important. So through you I would like to thank your organisations and older Hungarians in general who voted in the parliamentary election and helped Hungary to collectively decide on designating the path along which it wants to proceed over the next four years.
As I am sure you saw, after the election a government was formed. Many were surprised by it, because generally when a political community already in government wins an election, the government stays, and the old government continues its operation. In Hungary, this is not generally the case – at least when I am prime minister. The reason for this is that I am convinced that every four-year term has a different set of tasks. Every four years we are faced with a completely different set of tasks, and as we seek the people who are best suited to the tasks in hand, rather than distribute these tasks among already serving ministers, there are usually significant changes. This was the case in 2014, as it is now in 2018. If you cast your minds back, you will see that between 2014 and 2018 the task of the government was to stabilise and secure the changes and results which had emerged since 2010. You may remember that we had created a new Constitution and a completely new Labour Code, and we had introduced the “Women40” programme – just to mention one measure that also concerns pensioners. We had also created a completely new Civil Code and Penal Code – meaning that we had refashioned Hungary’s legislative attire. And while four years is enough time to finish the work of refashioning, it is not enough for the work of stabilisation. Therefore between 2014 and 2018 we sought to secure the family support system and the regulations aimed at encouraging full employment. This was successful – at least I think it is no exaggeration to draw this conclusion from the result of the election.
After 2018, however, this is no longer the task in hand, as what has already been firmly secured need not be secured any further. Instead we must understand what tasks await us in the five, ten or fifteen years after 2018. And what we have deduced from the situation of Europe and the situation of the European economy – including the situation of Hungary within it – is that from 2018 right up to around 2030 the most important task will be increasing the Hungarian economy’s competitiveness. This is because everywhere in the economy changes are taking place which we, too, must adapt to. If we fail to adapt, the performance of the economy will decline. If the performance of the economy declines, we will be unable to continue the family support system – which, incidentally, is the largest in Europe in proportion to gross national product, and which is something I believe we have reason to be proud of. And we will also be unable to continue our policy for maintaining – and even increasing – the value of pensions. This is because the economy must deliver its performance and retain its competitiveness, otherwise the state will have no revenues to distribute. This is why we came to the conclusion that from 2018 onwards it will be the Government’s responsibility to enhance competitiveness, to raise the level of the economy’s competitiveness; it is for this task that I have selected my ministers, and I have also restructured ministries, so that we can successfully rise to the challenge of the task in hand. You can see that after the election in April a great many changes occurred at both ministerial and state secretarial levels, but all these changes will serve to enable us to perform the task I have just described.
This is all the more important because you may remember that in 2010, after several rounds of talks, we concluded agreements with pensioners’ organisations which we can also interpret as having created an agreement between the civic, national and Christian government on the one hand, and pensioners on the other. Not everyone remembers it now, as 2010 was a long time ago, but back then pensioners had seen the value of their pensions fall year after year; and in 2010 we agreed to pursue economic policy which would enable us to preserve the value of pensions. In return for preserving the value of pensions and pursuing such a pension policy, I asked you to be so kind as to support our decisions for transformation of the economy, which aimed to strengthen the economy enough to generate the income which would in turn enable us to preserve the value of pensions. So you supported our proposals for transformation of the tax system, as well as the most significant changes – including the amendments to the Constitution. I am grateful to the older generations of Hungarian society: to pensioners who after 2010 did not shy away from the novel solutions and completely new approach embodied in these important changes – either related to the Constitution or to economic policy. You supported us throughout, and I would like to thank you for this.
At the time we said that the guiding principle of our pension policy would be something which in everyday language is summed up in the phrase: “We laugh together, and we cry together.” So when the economy is doing well, pensioners should also feel it in changes in their circumstances; and when the economy is doing badly, pensioners should likewise feel a change for the worse. But we had the latter earlier, before 2010, and we no longer felt the need to try that out again. But in 2010 we were just trying to imagine what it would be like when times were better. Today no one can claim that we are doing well. I believe that those who claim that things are going well now are not aware of the reality; but no one in their right mind can doubt that now we are doing better and have taken a few steps forward. Those who are unbiased in party political terms and have not completely lost all sense of objectivity will surely say that in Hungary today we have taken a few steps forward compared with 2010 – even though we still have more steps to take. When in 2010 we talked about the pension premium, generally everyone simply smiled, because – if I remember correctly – in Hungary a pension premium is only considered a possibility if the rate of economic growth is above 3.5 per cent. And as in the years prior to 2010 the economy had not grown – but had in fact shrunk – everyone was dismissive, saying that it was fairly disreputable to mislead pensioners by promising such utter nonsense, as in Hungary in the foreseeable future there wouldn’t be economic growth above the rate of 3.5 per cent. Let me respectfully inform you that this has been realised: growth has been above 3.5 per cent for some time. It was also at that level last year, and it will also be this year, unless our Finance Minister is mistaken – and he isn’t usually mistaken, particularly when it comes to upward trends: we didn’t borrow our finance minister from the ranks of optimists, but from the ranks of the hyper-cautious. He says that the level will be maintained this year, and that not only will our economic growth be above 3.5 per cent, but that it will be above 4 per cent: perhaps closer to 4.5 than to 4. This means that this is a significant economic achievement, and therefore a pension premium will also be paid this year. And according to all calculations, it will be higher than last time. As I see it, our earlier agreement is still in effect: we are pursuing a policy which seeks to preserve the value of pensions, and if possible to increase it, while you support economic policy which is capable of creating the conditions which can fund this pension increase.
Ladies and Gentlemen,
The manual for our policy, or the manual of our profession, was penned by our first king, Saint Stephen. Everyone who deals with governance in Hungary would do well to consult it. The “Admonitions” that our first king wrote to his son – who never became king – offer some important thoughts on how a country should be held together, and how every generation in a country must be given the opportunity to contribute to the work of the nation. This can be distilled in the Hungarian proverb: “The young to the battlefield, the old to the council chamber.” Saint Stephen dedicates a long passage to how the elderly must be involved in the council, because they have the knowledge which young people lack. The greater physical strength of the young counts for little, he writes: this is not enough in real life, if it is not combined with wisdom. Therefore the elderly must indeed be brought into the council. This, incidentally, is why we are sitting here today. This is the 21st-century embodiment of Saint Stephen’s warning that it should be forbidden to leave the older generations and their experience out of governance and the work of the government.
We can also see, however, that over the past one thousand years there have been significant genetic and physiological changes in the lives of Europeans – including of Hungarians. Therefore this year we are seeking to put into practice another pearl of wisdom: “An old person is not over the hill.” This means that as the European history of humanity moves forward, we can see how the age at which people are capable of working is also changing. Even in my childhood we spoke about people aged 60 as old, while today people of 60 may not be powerhouses, but it’s fair to say that they are strong, and there are very many of them who are willing to stay in the labour market – even though naturally not with the same hours and workload as when they were younger. In the history of government in Hungary, the subject of how we should look upon the employment of those over the retirement age is a long-standing dilemma. I clearly remember that after 1990, when the entire former socialist economy collapsed and mass unemployment descended on the country, the received wisdom was that those who reached retirement age should not only receive pensions, but should stop work, because others without work needed their jobs. Fortunately, we have now reached a position in which the reverse is true: in Hungary today there are more jobs than people under retirement age who are able to work. Therefore it seems perfectly logical to change our way of thinking, and to make it possible for pensioners who want to work to rejoin – or not leave – the world of the labour market, while also being able to retain their pensions. To this end we have now introduced new regulations. I have all sorts of statistical data about how many people have re-entered the world of work as a result of the launch of pensioners’ cooperatives. In Hungary at present there are 146 pensioners’ cooperatives, and they employ 10,600 people in total. And some time now – perhaps Mihály [Varga] knows the exact date, from 1 November – new regulations totally independent of pensioners’ cooperatives will be introduced, which will enable pensioners who work to receive their pensions as well as their salaries. Neither employers nor pensioners will be required to pay social insurance contributions – or social contributions as they might be now called – and there will only be a 15 per cent flat-rate tax on the earnings of pensioners. And that’s all. This means that employing elderly people will be a good deal for both employers and, I believe, for pensioners who feel strong enough to work. So on 1 November a new era will begin. There are various estimates of the anticipated combined effects of pensioners’ cooperatives and the most favourable ever taxation conditions for pensioners returning to work. There are between two and two and a half million pensioners in Hungary. Regarding how many of them will want to return to work, this two to two and a half million is an enormous number – in a moment I will say a few words about the difference between the two numbers. And if only a few per cent of these older Hungarian people decide to return to work – and old people are not over the hill – then the Hungarian labour market and the Hungarian economy will receive an enormous surge of energy, an enormous injection of energy. I believe that this will certainly also have an effect on next year’s economic growth. Because I think that now older people have the greatest reserves of knowledge, skills, experience and respect for work. We will all benefit if they are prepared to take part in the operation of the Hungarian economy for just a few hours a day in some atypical employment format. So I believe that from 1 November a momentous new world awaits elderly people in Hungary, who rightly want to receive and to keep their pensions, but who at the same time want the Hungarian state not to punish them, but to support them if they wish to work beyond their retirement age. This is what will now happen. Mihály and I have done a great deal of work on this. More than two years of technical work and calculations of all kinds were required before we finally arrived at the system which will enter into operation on 1 November.
Ladies and Gentlemen,
Another important fact is that the introduction of “Women40” policy has been one of the civic national Christian government’s most distinctive social policy measures, setting it apart from earlier governments. We all know what we are talking about, and as I see it the number of women taking advantage of this possibility has this year risen to 230,000. In Hungary today there are 230,000 older ladies – who in today’s world can hardly be described as elderly – who have worked for forty years, and have been able to retire, despite not having reached the general retirement age. In secret among ourselves– although perhaps we said so in public, so there’s no reason to call it a secret – we call this the grandmas’ pension; because we also intended this as a family policy measure. In essence we didn’t see this as a social policy measure, although it obviously has social aspects as well, but as a family policy measure; because we believed that if women can retire after forty years in employment, but before the general retirement age, this means that families will receive a great deal of assistance. They will offer young parents a great deal of help with child care, which, as we know, everyone needs – particularly if women are returning to work at the rate now seen in Hungary.
Ladies and Gentlemen,
I would like to tell you one other thing. Given that in almost all European countries populations are declining, you can see the debate – which is determining Europe’s present and will determine its future – on how these countries should respond to this phenomenon. This is a very serious issue. Of course it is mostly raised by economists, who say that if there are large numbers of pensioners and fewer active people the balance between the two breaks down, and sooner or later this can lead to economic difficulties, problems, and even serious crises. I do not deny this, but I see a problem which is more profound than simply an economic one. This is also a spiritual problem, and the general problem of our approach to life is expressed in it: it is that either we do not respect life, or we do not want it enough, which leads to all sorts of problems – not only economic, but also those of a cultural and spiritual nature. In any case, this dilemma or challenge is now affecting almost every European country. Interestingly, this is not related to the general level of religious observance in the countries concerned, because we see a dramatic decline in good old Catholic countries. So we can see such declines even in what we could say were the religious nations or countries of the European continent. It is difficult to identify precisely what causes faster, larger or smaller declines in a country’s population, and why it is that, for instance, Hungary’s previous birth-rate of 1.2 has now risen to 1.5. It is very difficult to answer this question. At any rate, the dilemma is on the agenda, and you can also see that this is the question – not necessarily stated in this form, but inferred from the responses given to it – which today so sharply divides the entire European continent. Because if there are not enough young people and we believe that this upsets the balance within society, we must then answer the question of how to restore that balance. The position of half of Europe is that if we don’t have enough young people we should import some – or buy some, if you like, bring them here: if we need strong young people, we should buy some from Africa and Asia; we should resettle migrants – foreigners, immigrants, call them what you will – to replace the declining native, indigenous populations, and then we should try to integrate them into our societies. One half of Europe has determinedly set out on this path. It is difficult to know whether this was a calculated response to their problems, simple rudderless passivity, or a consequence of countries’ colonial pasts – as most as these countries once had colonies, and most of the people arriving in these countries are from their former colonies. So it is difficult to tell whether this was a conscious decision on their part, or simply acceptance of being swept along by the currents of history; but whichever it was, this was their response. And you can clearly see that this response, this scenario or nostrum, is championed by very important forces in Europe who think that we have no alternative. They think that young people’s approach to life will not change. Young people, they think, will not want to have more children – and indeed as time passes, it also runs out on us: after a while even if people were to decide to have more children, their numbers would be too small statistically to result in a turnaround in the structure of society. So the only route that remains is the settlement of immigrants.
But there is another school of thought, which we might call the “romantic” school: this is us. We take the view that perhaps less than half of existence is subject to the inevitable: at least half is subject to choice and will. So if we want to change this situation, we may indeed be successful. But if we don’t want to, we certainly won’t be able to effect change. We would like our societies, or our society – let’s stay within the borders of Hungary, so Hungarian society, at least – to be able to reproduce and maintain itself biologically. Therefore we are pursuing a robust family policy. In our minds this does not simply mean that we support young people being able to bring into this world and raise every child that is planned and wanted. This would be a simple enough policy. We are enacting something like this, and soon there will be a national consultation, at the end of which we would like to come to some kind of an agreement with the womenfolk of Hungary on how to tackle this problem. But in my view it would be a mistake if the social response to this difficult question were confined to the issue of young people and their decision to have children. I believe that we need a change of culture, leading to the rehabilitation of how we think about the family, and how families consist not only of the young and their even younger children, but also of grandparents. I can tell you from first-hand experience that this is the case: I also have, I might say, personal experience and impressions about this. So in Hungary we should not simply help young people, but we should restore the concept of the multi-generational family model. I believe that this is something that doesn’t just affect elderly people, but elderly people will play an important role in our rehabilitation of the approach to the family – with older people not being seen as a burden on a community or a family, but instead being seen much more as a resource. They should not simply be seen as older people who need to be looked after, but their experience and strength – if they still have it – should be incorporated in the management of families. So in this respect we need more substantial changes, and the Hungarian government is determined to plan to assist the lives of Hungarians in pursuit of the multi-generational family model. And in this we are also counting on the members of the Seniors Council: we are counting on your help, your thoughts, your recommendations and your ideas. It is in hope of this that I open our meeting today, which is the first step in our cooperation over the coming four years.
Thank you for being here.