Government assistance and family support in Hungary

For a good month now the media have been full of reports about different ideas to reform the welfare system and to modify government support given as an entitlement to families for every child up to the age of twenty-one. The debate about child support is not new. SZDSZ has argued for a number of years that well-off families didn't need these monthly checks. SZDSZ highlighted two prominent politicians with large families: Viktor Orbán and Ferenc Gyurcsány. Orbán has five children; Gyurcsány, four. Surely, these two people don't need government handouts! MSZP was reluctant to change the current system. Socialist politicians argued that deciding who is eligible and who isn't would cost more than the government would save on the few thousand families who wouldn't qualify. In fact, no party thought about the issue in a truly innovative way until now, when MDF came up with a "revolutionary" idea. Erzsébet Pusztai, who is the party's spokesman on social issues, outlined an entirely different system of child support. Although I don't think it will be implemented, I find it intriguing and worthy of consideration.

First, let me say something about "free" Hungarian education. The fact is that it isn't free. Most of the children must buy rather expensive textbooks; only children whose parents can prove that their income is under a certain level will receive textbooks free. Cafeteria food is not free either. Again, one must prove eligibility. Erzsébet Pusztai with MDF's blessing proposed a different idea. Child support for children between the ages of four and fourteen should be given not to the parents but to the kindergartens and schools. In return schools would be truly free. No one would have to pay for textbooks, for food in the cafeteria, or for trips organized by the school. Moreover, MDF proposes to lengthen the school year. As in most countries, schools close for two to three months during the summer. Not only do children forget a lot that they learned during the school year; parents also have a difficult time finding accommodations for them during the long vacation. The better off parents spend money to send their children to camp; in some cases grandparents must take care of the kids while the parents work. The children of poorer families often end up hanging out on the streets.

MDF would go even further. If Pusztai's ideas were adopted, they would introduce much longer school days. In the afternoons beside extra classes in, for instance, foreign languages, there could be more gym, art, and music lessons. Schools would provide breakfast, lunch, and afternoon snacks. Moreover, the students could do their homework at school. They wouldn't even have to carry their books home. In addition, they wouldn't be unsupervised during the afternoon when their parents are still at work. Apparently about 250 billion forints are currently spent on child support. That amount of money would be enough, according to Pusztai, to introduce the new system. I might add that MDF's proposal also has another, most modest agenda: to make sure that parents receiving child support actually send their children to school. The Orbán government tried something like that by introducing legislation that tied child support to school attendance. The parties then in opposition, MSZP and SZDSZ, fiercely attacked the legislation and after 2002 the Medgyessy government abolished it.

Zsuzsa Ferge, a sociologist whose main concern is poverty, is outraged. She and others suspect anti-Gypsy bias behind the idea. Ferge also believes that this suggestion is strange coming from MDF, a party that has always emphasized the importance of family but now is trying to weaken family bonds. Zsuzsa Ferge said that the MDF politician's ideas exhibited inadequate knowledge of European practice and the philosophy behind it. In plain English, Erzsébet Pusztai is ignorant. As far as know, Zsuzsa Ferge hasn't made any constructive suggestions except to give more money to the poor.

One might have thought that after this rebuke Pusztai would be less zealous. But no! She stuck her neck out again when the mayor of a small village in northern Hungary came up with another idea. This time about financial assistance to families without a steady income. The village is Monok with a population of 1,600. Officially 7% of the population is Gypsy but this is most likely a low figure because most Gypsies don't identify themselves as such. In any case, about 10% of Monok's population is on financial assistance administered by the local government. The mayor, Zsolt Szepessy, in the last few months became known nationally because of his plan to change the village's financial aid program. He claims that he is not prejudiced. In fact, he is trying to defend the local Roma from userers who are just waiting for the cash received from the poverty-stricken Gypsies on the day of money distribution. He came up with the idea of a "social card." Instead of cash the recipients would get something like a debit card that they would be able to use at designated stores. They wouldn't be able to use the card for the purchase of tobacco products, alcohol, coffee, or soft drinks.

Pusztai and MDF find the Monok government's idea supportable. There are however basic differences between Szepessy and Pusztai in its implementation. Szepessy is going full steam ahead and is planning to introduce the system in Monok on September 1. He proudly pulled out of his pocket the prototype of his "social card" that resembles an ordinary bank card. There is only one problem: the introduction of such a card in lieu of cash is illegal at the moment. But today Monok's local council adopted the plan with added provisions that are surely unconstitutional. Those people who don't grow vegetables in their backyards and don't keep their property clean and orderly wouldn't receive any welfare payments. Not even in the form of a card. Pusztai and MDF of course would support the idea of a card only after the passage of appropriate legislation that would make the new system legal.

In any case, constitutional lawyers already have problems with the plan even without the vegetable gardens! One of them, István Szikinger, announced that the proposal is unconstitutional because the introduction of a card that distinguishes its holder is demeaning and because it inferes with free competition. After all, only stores with a contract with the local government would be able to handle these cards. Some people even claim that a person on assistance should be able to spend his money anyway he wants. Szepessy has a different opinion. According to him the assistance comes from public money and therefore the public has a right to ascertain that the money is well spent. The idea of the "social card" proposed by Monok reminds me of the American Food Stamp Program introduced in the United States in 1964. (http://en.wikipedia.org/wiki/Food_Stamp_Program) Actually, the "stamps" are no longer stamps but debit cards, and these debit cards in many states are also used for the distribution of welfare payments. One must be close to the poverty level to be eligible; currently about 10% of the American population is receiving "food stamps." Surely in small villages like Monok everybody must know who the welfare recipients are, and whether the payment is in cash or in the form of a debit card shouldn't make much difference in their social standing. Szepessy announced that he is going ahead regardless of whether his village's decision on the distribution of welfare payments is legal or not. People asked him what will happen if the Constitutional Court decides that Monok's system is illegal. He shrugged his shoulders: surely no one will jail him! The mayor who is supposed to execute the laws of the land has decided to take things into his own hands.

Comments

[Mark]

"Zsuzsa Ferge said that the MDF politician's ideas exhibited inadequate knowledge of European practice and the philosophy behind it."

This is a very good point. Most Western European states (the exceptions are states in southern Europe like Spain, Portugal and Greece, which for political reasons were left out of the post-war expansion of welfare) have a child support system of which non-income related cash payments form a sigificant plank. Clearly Hungary would move very far away from European norms of child support if it went down this road.

What is more is that Hungary does suffer from a severe demographic crisis, which is going to affect its ability to support its elderly and indeed to produce economic growth in the long-term, and concerted state action to offset some of the costs of raising children is going to be necessary to reverse this. More investment in families is a constructive suggestion - it isn't just Ferge that says this, but all the international evidence points this way. In 2001 the UK's Department for Work and Pensions commissioned a comparative 22 country survey of child support packages (http://php.york.ac.uk/inst/spru/pubs/1204/). Its core conclusion: "Those countries that make most effort to transfer resources horizontally have the more generous child benefit packages. They are also the countries with lower relative child poverty rates and most of
them have higher levels of fertility. Policy matters." (p.205) In Hungary's situation removing or reducing redistributive child support is likely to be a false economy.

"Pusztai and MDF find the Monok government's idea supportable."

What I find most interesting is some of the characters with whom Pusztai is associating herself. Szepessy is one of a group of seven mayors who have formed a group to develop what might be euphemistically described as innovative social policies (http://www.nepszava.hu/default.asp?cCenter=OnlineCikk.asp&ArticleID=1143227). Two of the other six are the mayors of Kerepes and Kiskunlacháza, which really should tell you all you really need to know about their innovative social policies, and their ideological inspiration.

But as we know from some of the characters they choose to sit with in the European Parliament (http://www.guardian.co.uk/politics/2009/jul/19/rabbi-tories-polish-mep and http://www.timesonline.co.uk/tol/news/politics/article6554672.ece ), the MDF are not averse to associating with the extreme right when it suits them.

[Eva S. Balogh]

Mark: "But as we know from some of the characters they choose to sit with in the European Parliament (http://www.guardian.co.uk/politics/2009/jul/19/rabbi-tories-polish-mep and http://www.timesonline.co.uk/tol/news/politics/article6554672.ece ), the MDF are not averse to associating with the extreme right when it suits them."

I don't think this would be true of MDF. I suspect Bokros wanted to be in the finance committee and he wouldn't have been able to if MDF remains with the Christian Democrats.

[whoever]

Eva, you're taking a granular approach to the thicket of social problems which beset Hungary. I think the suggestion of reducing the holidays and extending the school day is a good one. Linking it to cuts elsewhere is disingenuous.

With the current absolute weakness of Hungary's situation - and I'm not sure you appreciate just how weak this is - the cuts to child benefits would create a host of other problems to the many who are struggling with EU-size utility bills on Second World salaries.

You can see and smell the poverty in Hungarian towns now. It's a rising tide. After 8 years of "socialist" government there is no hope that a super solution exists. Gyurcsany's concept of personal responsibility never extended to his own social responsibilities to those less fortunate than himself. He lacked the empathy to approach social issues from the correct perspective. But why would he have empathy? He's a biology teacher by training.

The investment needed is too great and the material and psychological resources are too minimal. Hungary is locked in a sharpening spiral of decline; not just as a result of the MSZP, but because its people fail to acknowledge their own limitations, and have largely bought into a savage and unrealistic concept of "rogue" capitalism and quack solutions.

Fiddle about and make more families on the edge of poverty poorer, if that satisfies. But linking educational improvement to cuts in real income is not the way to improve childrens lives, and I'm sure most in the EU would acknowledge that.

What this debate illustrates is a lack of fundamental seriousness. Debates about how to reduce child poverty and improve the education system are vital. But this idea, of detaching the two, is bananas, as is the idea mooted by Bokros of parents clubbing together to build their own nursery from scratch.

Hungary does have the money to support a decent, free education system. What it doesn't have is people equipped with the resources and know-how to support themselves if government should withdraw from the money splashed on family and community support. We may wish it were different.

It's like the number of disability benefits: it's a very high number. People think that many are claiming disability falsely. But I'm not so sure. There are many damaged people in Hungary. People who couldn't hold down a normal job, because of psychological issues.

We need to separate wishful thinking from those who believe in neo-liberalism, from Hungary's reality. Sure, after consistently investing in the next generation, "up-by-the-bootstraps" solutions may be more appropriate. But now, they simply create a tidal wave of misery.

The cat's in the tree wailing - leave it to come down on it's own if you like. But when you come back in the morning and find a corpse on the ground...

[Mark]

Éva: "I don't think this would be true of MDF. I suspect Bokros wanted to be in the finance committee and he wouldn't have been able to if MDF remains with the Christian Democrats."

This doesn't contradict anything I've said. From any standpoint of political principle or even democratic representation, Bokros's membership of a group which consists of Eurosceptic conservatives and some fairly unpleasant far right elements is a bit strange (don't you think he'd be better off with the Liberals and Democrats? Given that they've just lost their Hungarian members, and that they also contain some conservative parties like Ireland's Fianna Fail, I'm sure they'd have had the MDF). If Timothy Garton Ash can criticise the UK's Conservatives for their role in this group given some of the unpleasant characters within it (http://www.guardian.co.uk/commentisfree/2009/jul/29/david-cameron-european-parliament-conservatives) I'm sure that Bokros and the MDF can be asked similar questions.

My problem with the MDF for a long time (since before 2002) has been that under its current leadership it wants to run with the liberal fox, while hunting with the right-wing hounds. If they really are so opposed to the far right why is Pusztai so keen to agree with their ideas?

[Eva S. Balogh]

Mark: "Bokros's membership of a group which consists of Eurosceptic conservatives and some fairly unpleasant far right elements is a bit strange (don't you think he'd be better off with the Liberals and Democrats?"

Yes, I do, but you know as well as I do that MDF is terribly afraid to be associated with the left-liberals in any shape or form.

[whoever]

The MDF's right-wing grouping in the EP is quite appropriate. Bokros and the MDF are not liberals, even in the sense of Fianna Fail. They could probably be described as neo-conservatives, even if they lack the outright nationalism of US neo-conservatism. More accurately, the modern MDF is perhaps analogous with the sort of policies Keith Joseph advocated in late 70s Britain: only without the corporate backing showered on Mrs Thatcher's not-so-Conservatives. At least they're open about their ideology, unlike many on the "left."

[Mark]

Whoever: "They could probably be described as neo-conservatives."

This is more or less what I was getting at. One does have to distinguish between Bokros himself and the MDF. I do think Bokros would be best placed with economically liberal parties like the German FDP or the Dutch VVD.

As for the MDF I suspect there is actually little difference between them on social and cultural issues between them and the rest of the right. The difference is their committment to a limited state, and low taxes - a sort of right-populism for the rich, that isn't that dismilar to what was offered in the UK by Margaret Thatcher 20 years ago, or by the US Republicans now. In that context their closeness to the far right on "welfare" isn't too surprising. They just need to be a little more honest about where they really stand.

[whoever]

But in a strange way the MDF have been one of the more consistent political parties since crashing in 1994. To compare them to the British Tories is not the full story.

On a local level they cling to an "honest burgher" style of middle-class politics that bears some relation to the Austrian OVP; I can well believe the national leadership accounts of surveillance and undercounting in opinion polls.

I think they are normally quite honest about where they stand.