II - Changes to the Budgetary Process

Budgetary process   

Describe the main characteristics of the budgetary process (cycle, actors, instruments, etc.) in Hungary.     

The basis of the budgetary process is governed by the Fundamental Act of Hungary, in Article 36. Act CXCV of 2011 on State Finances regulates the budgetary process in detail, from Articles 12 to 22.

The dates of the budgetary process are different in the year of elections, because the new Government is usually in office from May. Based on the proposal of the Minister for National Economy the Government defines the main directions of the economic and fiscal policies, in particular the goals of the tax policy and the budgetary policy, and ascertains that the goal balance shall be in accordance with the reduction of the public debt. The Minister for National Economy works out the detailed plan of the schedule.[1]

The budget consists of chapters. The government body responsible for a chapter plans the incomes and expenses.[2] The Minister for National Economy prepares the draft of the budgetary act and submits it to the Government.

The Government presents the draft to the Fiscal Council. The Council forms an opinion about the draft in 10 days. If the Council does not support the draft the Government redesigns the proposal. The Government can only submit the proposal to the Parliament if the Fiscal Council supports the text.[3] The Government presents the proposal to the Parliament no later than the 15th of October.[4] Each committee of the Parliament comments on the draft, but it is the Budgetary Committee that presents the draft to the plenum of the Parliament.[5]

The Parliament discusses the draft together with the opinion of the State Audit Office and the Fiscal Council. The Parliament decides about the main numbers of the incomes and expenses of each chapter and the balance of the budget with the deadline of the 30th of November. After this point there can be no amendments to these numbers.[6]

As mentioned before, the approval of the Fiscal Council is needed before the approval of the Parliament. The Council examines if the budget is in accordance with the balance requirements incorporated in the Constitution. If the Council refuses to approve the Budgetary Act until the 31th March of the year into the Budgetary Act the President can dissolve the Parliament.[7]

General change           
How has the budgetary process changed since the beginning of the financial/Eurozone crisis?

Before the financial crisis, the budgetary process was really similar to the current one. There were less strict deadlines in the system. Most of the deadlines were decided by the Government that released governmental statutes about the budgetary process. The only strict deadline was the 30th November, the date before which the Parliament had to decide about the main numbers of the budget that could not have been changed after this date.

The rules concerning the Fiscal Council were not part of the budgetary process, because the Fiscal Council was created after 2008, as described in the answer to questions II.1 andVII.5.

Institutional change        
What institutional changes are brought about by the changes in the budgetary process, e.g. relating to competences of parliament, government, the judiciary and independent advisory bodies?

Apart from the introduction of the Fiscal Council with its far-reaching powers, no changes were introduced.

Change of time-line 

How has the time-line of the budgetary cycle changed as a result of the implementation of Euro-crisis law?

No changes were introduced.

What other information is relevant with regard to Hungary and changes to the budgetary process?

No other relevant information.

[1] Article 11 of Act CXCV of 2011 on State Finances

[2] Article 14 of Act CXCV of 2011 on State Finances

[3]Article 24 of Act CXCIV of 2011 on Economic Stability

[4] Article 22 paragraph 2 of Act CXCV of 2011 on State Finances

[5]Standing Order No. 120 paragraph 3 of the Resolution 46/1994 (IX. 30.) OGY on the Standing Orders of the Parliament of the Republic of Hungary

[6] Article 22 paragraphs 6 and 7 of Act CXCV of 2011 on State Finances

[7]Fundamental Law of Hungary, Article 3 paragraph 2 point b