Hungary. On the holiday of love

31 December 2011 by Ferge Zsuzsa

Christmas being the holiday of love and goodwill, and of compassion towards the needy, a summary of what has happened to them over the past year seems to be timely.

The overall picture – in Hungary and in the world at large – is pretty acrid. According to the latest OECD report, the inequalities which make up the framework for poverty are on the rise worldwide. At this point even the OECD feels that the theory of the trickling down to the poor and poorest of benefits from economic growth was erroneous. That just hasn’t happened. One way of creating an obstacle or barrier to deepening poverty, says the OECD, might be for governments to be a bit more assertive in taxing the incomes and assets of the wealthier people and/or in reinforcing the social safety net.

The Hungarian Central Statistical Office reports that in 2010, the income gap in Hungary continued to grow with the incomes of the one million people (bottom decile) at the bottom of the ladder de facto declining while those of the one million at the top “grew spectacularly.” In several of the poor micro-regions child poverty researchers were able to monitor the combined effects of the crisis and government measures on poor families with children up until the middle of 2011.Poverty had always been high among the families with children in these poor regions, standing at about 50 percent, which is two to three times higher than the nationwide average. However, between 2009 and 2011 it shot up from 51 to 62 percent! The increase was particularly harsh among people already living in deep poverty, the jobless and the Gypsies. The drop in income is visible in poorer nutrition but has become shockingly apparent in the inability to pay bills.

The proportion of households that are behind on their electric and water bills has doubled. The impact of growing poverty involves an objective deterioration in living standards and a subjective rise in distress. A growing number of people live in dread of losing their jobs and homes, and have abandoned their earlier dreams of sending their children to college.
There is nothing new about the flows leading to expanding poverty or about the policies which ignore the plight of the poor and deny them help. In 2009 we already accused the government of waging a campaign against the poor instead of one against poverty. But in the past year and a half we have witnessed several measures we have to qualify as unusual, or at least as far more serious than any previous ones when it comes to hurting the poor. In fact, government actions regarding the poor have shifted from a course of reluctant assistance to one that began with a curtailment of rights and with systematic humiliation, the gradually led to an outright rejection of the poor, the criminalization of poverty and eventually the treatment of the poor as criminals.

The first blow to management of the society-wide difficulties was, in 2010, the abolition of progressive income taxes for a flat-rate tax system. It cut available resources while redistributing 500 billion forints, taking the money from the poor and giving it to the rich. (The family tax benefit is also serving this purpose: the better off families are able to take a substantial deduction on their taxes while poor ones got nothing.) Subsequent tax measures (such as termination of tax credits for low-income families) widened the inequalities even further. The predictable consequences of these changes in income taxes have been largely, though not admittedly responsible for the shortfall of public resources.

Initial measures (albeit by no means new ones) include a drop in the level of social benefits. One component is the trimming of the budget norms of institutions offering social, educational or similar services. The backpedaling qualified as necessary in 2011 and 2012 has been particularly harsh on the institutions serving the weakest and most vulnerable of the poor. The norms provided for childcare institutions, daycare, meals for children and child protection have been mostly unchanged since years so that inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. gradually eroded their real value. In 2012, budgets for improving welfare and child welfare services have been reduced by two-thirds, with the conditions for care deteriorating particularly sharply for the most vulnerable – psychiatric patients, drug dependent persons, victims of domestic abuse attempting to escape their abuser, and the homeless. Individual benefits in cash have been reduced in different ways. The most common is the omission of indexation to prices. Since 2008, family allowances and provisions for the poor have not been indexed. The former government thought that it should at least apologize for stopping indexation. The government in office since 2010 takes for granted the absence of indexing set in stone for years to come. The lack of indexing alone has resulted in a 20 percent loss in cash benefits between 2008 and 2012.

De facto cuts are even more alarming in scale. Initially, remuneration for communal work was at the official minimum wage level that amounted to 73,500 forints/month before taxes in 2010. (To help orientation: the monthly sum after taxes of the subsistence minimum calculated by the Central Statistical Office was 75,000 forints for a one-person household, 217,000 forints for a family with two children in 2009.) The public employment law adopted in 2010 has introduced a new sub-minimum for communal work, which in August 2011 was set at 57,000 forints. However, government experts decided that the net amount, roughly 40,000 forints, was still too high to stimulate people to get “real” jobs, so they cut the remuneration for full-time communal work to 45,600 forints before taxes, about 30,000 forints after taxes. In 2011 the government cut also the total amount of assistance that can be provided to a jobless or poor family by fully 30 percent to 42,000 forints/month irrespective of the number of children. Another way in which benefits can be reduced is by cutting the eligibility time span. One excellent example of this is unemployment benefit.

After 1990 it was insurance-based, proportionate to earnings, and offered for a lengthy (albeit diminishing) period of time followed, at least for a while, unemployment assistance with no time limit. After a series of re-naming and cuts the two constituent elements have been fundamentally altered. The first period of unemployment benefit (having now a vague relationship to social insurance) is presently called job-seeking support, with a “generous” phase lasting for three months in which the maximum payable Payable A sum of money that one person (debtor) or group of people owes to another (creditor). amount is 120 percent of the minimum wage. This is followed by a second three-month period, with the payment ceiling set at 60 percent of the minimum wage. The job-seeking support is followed by compulsory communal work or “job-replacing” assistance with tight conditions, 

This is the most miserly unemployment benefit system in all of Europe. In addition, frequent changes in the rules and definition of concepts are deliberate ways of keeping the poor in the dark and guessing about what they can receive. The concept of universal “family allowance” still exists, but what families actually receive is called “child-raising support” or (if the child is over six years old) “educational support.” This makes it possible to have one set of rules for the one and another set for the other (e.g. withdrawal of the educational support in case of truancy). The terms of the first (already repulsive) “public work” program introduced in 2008 have been severally changed. “Public work” was renamed in 2010 “public employment”, assured for more people but for far shorter periods, and shorter and worse paid daily working time (usually 4 hours for half-pay). 

The former benefit for those waiting for available public work was called “ready to serve support”- already an enticing term. It was renamed “wage substitution benefit” from 2010 until August 2011 when it was changed to “employment substitution support.” This combination of renaming measures could conceivably be part of a highly visible scramble to wipe out the past two or seven decades, qualified as vile and sinful, from the slate of history.
The world over, prerequisites are being set for entitlements to cash benefits called now CCT, conditional cash transfers. The original purpose of CCT is to make assistance available to the poorest in less affluent countries where welfare systems are underdeveloped or incomplete, making availability dependent on performance by the poor of tasks that will improve their situation on the short term and may improve their life chances on the longer run. For instance, families with children are provided with a measure of assistance if they send their children to school, if their children complete secondary school, or if they see to it that their children receive vaccinations, etc.

In Hungary this link between assistance and conditions is difficult to interpret because the benefits were initially comparatively advanced and entitlements were extensive if not universal. Therefore conditions imply punitive sanctions instead of incentives to do something new and then to be rewarded . The conditions set here require action in order not to be deprived of existing benefits, and non-compliance becomes a factor in reducing rights or in some cases, is actually criminalized. If a person does not accept the (first) public employment opportunity offered, he or she will be excluded from receiving jobless benefits for three full years. If a child is absent from school 50 hours without certification the family allowance will be withheld for six months. More recently conditions increasingly comprise a series of behavioral rules. A long-standing rule that is now extended to new (for instance some disabled) groups is mandatory cooperation with some sort of authority. These are in principle supposed to assist reintegration but most of them do no more than handle the administration of recipients formally documenting their willingness to cooperate.

Since 2010 the law has also specified as part of conditionality “the obligation to insure the orderliness of the residential environment.” Local governments add whatever content they choose to this legal framework, which can go far beyond keeping the public area around the house and the fence in order. I’ll admit that insofar as I could get acquainted with the rules adopted by the local authorities most local governments do not abuse the opportunities offered by the law. However, in areas where the prejudices against the poor and the Gypsies are thriving we can find many humiliating conditions that sharply interfere with the private lives of residents. To underline the cynicism of the forces in power, poor families will find it impossible to meet some of these prerequisites. A random glance at these local decrees shows for instance that “a) the height of grasses on the land may not exceed 15 cm, and b) weeds may not exceed 15 percent of the usable land and may not be higher than 15 cm.” The interference also covers the inside of the homes. One condition for aid is thatthe home must always be clean, in order and freshly whitewashed,” and that “to ensure healthy personality development the personal space in the residential areas must be a minimum of 6 square meters per person,” while other rules stipulate that “it is necessary for all persons residing in said property to maintain personal hygiene through regular care of their persons and to secure the cleanliness of personal clothing on a continuous, day-to-day level and to store same in a clean place.” Adherence to these conditions may or must be monitored, which is tantamount to a legal invasion of privacy.

The successive methods employed to further impoverish the poor have been quite creative. The above mentioned conditions for receiving aid that were impossible to meet were enacted in 2010 originally for the able-bodied poor, extended to all poor people only in 2011. A step in the realm of curtailment of rights is a growing fraction of benefits – specified as cash benefit in the law – to be provided in kind, either in full or in part. This not only involves complicated and expensive administration but it also objectively isolates recipients from the market, the monetary economy. There has been a growth in “Walls of Shame” and other forms of public condemnation (if someone does not pick up a lunch that was requested or doesn’t keep his or her yard in specified order. etc.). The number of documents required of the poor to certify compliance with the powers that be is increasing. Social services have been weighted down by bureaucratic assignments that are completed at the expense of their substantive services.

In the meantime, there has been a steady rise in prejudice and discrimination against the poor, and primarily against the Gypsies, which has often tipped over into open hatred. Not only has the media encouraged this but so have the forces in power by not standing up to provocations, threats or deeds of violence and illegal marches initiated by the far right Jobbik Party, and by statements coming from important politicians using the same vocabulary. Public speech that isolates and criminalizes the poor is on the rise (people foraging through garbage for survival are spoken of as “perpetrators,” and the homeless are said to “be occupants of important parts of cities, parts that are regularly accessed by the public”). The initial expression “Gypsy criminality ” has been expanded into tales of “Mafias” organized by beggars and the homeless, followed by even more crime categories. In his “State of the Nation” address the prime minister charged that many people failed to work because they made a living in other ways, for instance, as “chicken thieves.” According to the mayor of Budapest, “homeless criminality exists, whether we like it or not”.

One early manifestation of prejudice is the claim that the poor fritter away social benefits to buy alcohol and play the gambling machines, depriving their children of necessities, and that they lie and cheat to obtain the aid. (A wealth of scientific research has proven that as far as most poor people and Gypsies are concerned these charges are untrue, but no one seems to be bothered by the perpetuation of these lies.) On top of all this the Interior Minister has appointed himself to be the person “who will teach the strata that hold work in contempt how to work, and will clean up our public areas from the beggars and the people ruining the general good mood of the country.” Work camp supervised by police are being introduced as the place of choice to teach people to work. The new places where the homeless are being collected are supervised by the police. There are a number of tools being used to clear public areas from beggars and foragers. One cannot forage in the trash if it contains nothing of value. Therefore, the effective way of handling trash collectors appears to be to take away - at least in the downtown areas - the selective garbage containers that people have finally begun to use. Of course, the best cleanup tools are bans, cynically high fines, and in cases of “recidivism,” imprisonment. The amendment of the Act about Offences that sanctions rough living by high fines (151,000 forints), and in case of recidivists by imprisonment was adopted on November 14 2011.

With this, the country – with its politicians at the helm – has overstepped the boundaries of humaneness. In this new millennium Hungary is the first country in Europe to criminalize and imprison the poor, using police coercion for the sole “crime” of being poor. Let us remember this fact on the day we celebrate charity, love and goodwill Goodwill The difference between the assets on a company’s balance-sheet and the sum of its tangible and intangible assets. When one company takes control of another company, the acquiring company generally pays a price that is higher than the value of the net assets. Goodwill generally consists of intangible elements, such as brands, which are evaluated subjectively. .

Ferge Zsuzsa





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