Part I — Situation overview

On 8 September Parliament began the general debate on the amendment of the act on the 2026 central budget. The 125-page proposal submitted by the Government on 1 September, prepared by the Ministry of Finance, is the first full-value fiscal self-definition after the change of government: not a technical correction but a budget redrawn two-thirds of the way through the year. On Portfolio’s calculations the originally planned deficit of 3,600 billion forints under the EU methodology (ESA) almost doubles, to 6,900 billion forints. In 444.hu’s Dohánygyár programme Zoltán Török, chief analyst of Raiffeisen Bank, highlighted that of the deficit envelope in the original plan adopted last summer, corresponding to 3.7 per cent of gross domestic product (GDP), more than ninety per cent had already been used up by the end of March. The warning sign, however, is not the headline figure but the structure: the primary deficit, calculated without interest expenditure, rises to 3.6 per cent this year, while the growth on the revenue side does not derive from an improvement in the underlying economic processes.

Two elements of the proposal received particular attention. One is the Contingency Fund of 500 billion forints, which appears as a separate subheading within the chapter on the direct revenues and expenditures of the budget. Its size is 0.54 per cent of GDP, and it makes up seven per cent of the amended cash-flow deficit. According to the explanatory memorandum of the proposal the envelope serves the budgetary consequences of the drought affecting almost the whole territory of the country and of the inherited energy crisis — the text adds, however, that it “also serves as cover for other unplanned expenditure arising from external circumstances”. The government may reallocate from the fund by public decision; the Fiscal Council named publicity as the guarantee, but Parliament does not vote on the itemised use. On the Ministry of Finance’s estimate the shutdown of the Paks nuclear power plant may burden the budget by 50–95 billion forints a month. The government offset the 500 billion of expenditure with savings of 400 billion forints already realised and a further payment of 300 billion forints prescribed for budgetary institutions. The detailed content of the latter is not yet known. At Portfolio’s background briefing Finance Minister András Kármán put it that if the full envelope is not needed, the deficit may remain below the planned 7.5 per cent.

The other element is the additional health resources. The expenditure appropriation of the Health Insurance Fund rises from 4,945 billion forints to above 5,112 billion forints, which compared with the actual 2025 outturn of 4,902 billion forints means a surplus of 210 billion forints. The curative-preventive fund grows from the 2,955 billion of the meanwhile amended figure to 3,004 billion forints. This is a substantive increase, but it is not the 500 billion forints a year that the governing party promised both before and after the election, and on the basis of which the government would raise state health financing to seven per cent of GDP by 2030. No trace of the 20–25 per cent pay rise signalled to health professionals is yet to be found in this year’s amended budget. MIAK’s reading: both items are vulnerable at the same point. The 500 billion reserve and the 210 billion health surplus are in themselves neither good nor bad — their quality is decided by whether a rule of use fixed in advance and an outcome indicator verifiable afterwards go with them. MIAK applies to the new government the same yardstick it asked of the previous one: what matters is not who spends, but whether they account for it.

Part II — Foundations in the literature

Behind the two disputed elements of the amended budget stand three classic propositions. János Kornai, the economist of Hungarian origin who developed the theory of the soft budget constraint (professor at Harvard between 1986 and 2002), showed in his 1980 monograph A hiány (Economics of Shortage) that if an actor can regularly count on external rescue, the budget constraint ceases to act as a force regulating behaviour and becomes a mere ex post accounting relationship. A reserve of free use, without an itemised parliamentary decision, brings precisely this softening into the system. The International Monetary Fund (IMF) volume of the Fiscal Monitor on health spending measures the divergence of the sum from the result: the spending efficiency gap — the difference between the actual result and the best result attainable from the same resources — is some 31 per cent even in the advanced economies. A significant part of the additional resources is therefore absorbed without result if there is no performance measurement alongside it. And Carmen Reinhart and Kenneth Rogoff, the Harvard economists who worked through eight centuries of the history of financial crises, warn about the recurring self-deception of borrowers and lenders alike. This “this time is different” syndrome grows strongest precisely in those periods when a fresh governmental mandate and market confidence are available together. The detailed treatment of the literature — author by author, with quotations — can be found in section 6.4 Literature in detail.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures.

3.1 An activation rule and itemised public accounting for the Contingency Fund (within 30 days of the promulgation of the act)

The existence of the reserve is in itself defensible: in a year burdened with drought, power plant outages and an energy market shock, forming a reserve is responsible planning. The problem is the openness of the authorisation. MIAK proposes that within thirty days of the promulgation of the act the government promulgate the activation rule of the fund. This must contain three elements: (1) which types of external event — water levels, an energy price index, an agricultural damage estimate, power plant availability — open the envelope, and above what threshold value; (2) what the largest sum reallocable by a single decision is; (3) within how many days the decision goes up on the public money platform. The last of these is a direct application of MIAK’s programme point A1 (public money dashboard): every payment from the envelope should be available in machine-readable format, broken down by beneficiary and legal title. The counter-cyclical stabiliser of programme point G15 describes the same logic in general: a reserve works if it is automatic and tied to a trigger condition fixed in advance, rather than to case-by-case discretion. In Kornai’s frame (see 6.4.1) this is the difference between a hard and a soft budget constraint: a reserve without a rule does not constrain, it merely books.

3.2 An outcome indicator alongside the additional health resources (by the submission of the 2027 budget)

The dispute about the 210 billion forint surplus is today about what we measure it against. MIAK’s proposal is that we make the dispute decidable: by the submission of the 2027 budget the health ministry should assign to the main lines of the curative-preventive fund the three outcome indicators that measure the effect of the use of resources. These are: (1) the proportion of patients on a waiting list of more than thirty days, by type of intervention and by institution, according to the public data platform logic of programme point E3; (2) the proportion of unfilled medical and health professional posts, by speciality and by county; (3) the avoidable mortality indicator — of those deaths that could have been prevented by care provided in time — which tracks the difference between the domestic figure and the EU average, building on the input of the E4 prevention data programme. Programme point G1 makes the same thing a general rule: every large budgetary item must be backed by a compulsory target indicator and performance indicator. Without the indicators the dispute about the additional resources will be stuck for ever at the question of “compared with what” — the Fiscal Monitor’s spending efficiency gap (see 6.4.2) shows precisely that this question is not rhetorical.

3.3 Launching a spending review programme in parallel with the 2027 planning

The structure of the deficit — the primary deficit of 3.6 per cent and the rising interest burden — means that consolidation cannot be resolved from the revenue side in today’s yield environment. MIAK therefore proposes that in parallel with the planning of the 2027 budget the systematic spending review under programme point G21 be started: a zero-based review of budgetary items, asking not by how much we should increase, but whether, if we were not doing it today, we would start. In the first round the chapters should be taken where the payment obligation of 300 billion forints requires intervention in any case — so that the payment becomes a decision on priorities rather than a linear withdrawal. The result of the review must be made public in accordance with the subsequent impact assessment logic of programme point G20, and for every item above 50 billion forints a measuring-back within 18 months must be prescribed.

The three proposals are bound together by the same principle: the quality of a budget is decided not by the headline figures but by the rule placed behind them. The activation condition says when the government may reach into the reserve. The outcome indicator says what we received for the additional resources. And the spending review says where the resources can be found without pushing the deficit further out. None of them constrains the government in what it spends on — only in doing so without accounting for it.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Economy A separated reserve makes the handling of extraordinary expenditure more transparent than a series of reallocations made along the way; if the envelope is partly left over, the deficit may close below the planned 7.5 per cent, which strengthens the confidence of the market and of the rating agencies The open authorisation of use may bring back the practice of year-end reallocations promulgated in the official gazette; the details of the 300 billion payment obligation are unknown, so the credibility of the offsetting cannot be verified
Healthcare The 210 billion forint surplus is a real growth in resources compared with the actual 2025 outturn; raising the lines for high-value pharmaceutical financing and for medicine subsidies strengthens specific areas of care The gap between the promised 500 billion a year and the actual increase is a confidence risk; the absence of cover for the health professionals’ pay rise does not solve the retention problem, and without an outcome indicator the effect of the surplus will not be demonstrable
Public administration The requirement of a public decision for the reserve may create a stricter documentation practice than in the case of earlier similar funds Parliament does not decide on the itemised use, so budgetary control weakens; the widening of discretionary power sets a precedent for future governments too

The main tension of the package runs between flexibility and constraint. In a year burdened with shocks the value of room for manoeuvre is real: if the water level of the Danube or a power plant outage generates an item of hundreds of billions within weeks, a rigid budget is itself a risk. At the same time every flexibility to which no condition fixed in advance is attached later turns into political room for manoeuvre. The proposal tips towards the risk side if the activation rule of the envelope is not created, and its use is concentrated in the last weeks of the year. MIAK criticised this pattern in the case of the previous government’s similar funds too, and the change of government does not make it acceptable. The second question for consideration is that of the health surplus: expanding resources and structural transformation are competing priorities, because transformation costs more in the short run than it saves. This is manageable if part of the additional resources is expressly earmarked for the one-off costs of the transition, rather than for financing existing operations.

Part V — Measurability and summary

5.1 What is worth following? (suggested KPIs)

MIAK proposes four performance indicators (KPIs, in full: Key Performance Indicators) from which it will be visible in 6, 12 and 24 months whether the amended budget has brought a policy result:

  • The year-end residue of the Contingency Fund and the time distribution of its use: the suggested target is that at most 20 per cent of the use of the envelope should fall in the last six weeks of the year. Congestion at the end of December in itself indicates that the envelope operated on a residue logic rather than a crisis logic.
  • The publicity turnaround time of reallocations from the reserve: the suggested target is that every decision should be available in machine-readable form within 30 days of its adoption, by legal title and beneficiary.
  • The proportion of patients on a waiting list of more than 30 days: by the yardstick of programme point E3, by type of intervention. It is worth following whether a shift is demonstrable 12 months after the additional 2026 resources.
  • The path of the primary deficit: starting from this year’s level of 3.6 per cent for the deficit calculated without interest expenditure, the 2027 budget and the medium-term path will show whether the correction is one-off or lasting.

5.2 Summary

MIAK’s request in a single sentence: in the debate on the amended budget the members should argue not about the headline figures but about the rules. Concretely: an activation rule and an obligation of public accounting for the Contingency Fund within thirty days, three outcome indicators for the health surplus by the submission of the 2027 budget, and a spending review starting in parallel with next year’s planning. None of these requests is about the government spending less — they are about spending being verifiable afterwards.

Two MIAK foundational values are in play here. One is data-drivenness: a professional judgment on a 500 billion envelope and a 210 billion sectoral surplus is impossible today because there is nothing to measure them against — an indicator is not bureaucratic extra work but the only way in which the dispute becomes a question of fact. The other is accountability: for MIAK the yardstick does not depend on who exercises power. The same freely usable reserve that MIAK criticised in the case of the previous government will not be any better under the new government because its justification is different. This is precisely the test of credibility: the yardstick has to be held even when the criticism is less comfortable.

Part VI — Reasoning and further sources

6.1 The framing of the press by spectrum

The economic band carried the topic in the greatest detail, and its framing was purely figure-driven. Portfolio did not run on the headline deficit figure but picked out individual items from the 125 pages of the bill, and published a separate analysis on each of the two main elements. On the health lines it made the question of “compared with what” the backbone of the article — it derived four different bases of comparison and presented their differing results in parallel. And on the Contingency Fund it put at the centre the openness of the authorisation of use and the risk of a return of the year-end reallocation pattern. This is the framing that keeps the debate at the level of regulation rather than the attribution of political intent.

In the liberal-left band the emphasis fell on the question of inheritance and responsibility. 444.hu’s Dohánygyár programme turned the temporal logic of deficit management into an everyday image — ninety per cent of the original envelope being used up in the first quarter — and expressly tied responsibility to the preceding economic policy. Telex, by contrast, placed the question of the Hungarian budget in a world economic rather than a domestic political frame: through the global rise in government bond yields and the run-up in western debt levels since 2007 it showed that the external limit on room for manoeuvre is narrowing, irrespective of who governs. The two framings lead to the same conclusion, but by different arguments: one makes the inheritance, the other the external environment the primary explanatory factor.

The conservative band did not bring the debate on the budget amendment into a separate analytical focus on this day; other topics ran in Magyar Nemzet’s and Mandiner’s Monday and Tuesday offerings. By MIAK’s yardstick of being ideology-free this does not exempt us from presenting the consideration: the conservative counter-argument that can be formulated against the Contingency Fund — that crisis management needs quick room for manoeuvre not tied down in advance, because a rule never foresees the next shock — is substantive and must be answered. MIAK’s answer to this is that threshold-based activation and speed do not exclude each other: an automatic trigger condition is in fact faster than case-by-case discretion, and is verifiable afterwards as well. Népszava’s health interview — in which the health economist Csaba Dózsa says that the turnaround in Hungarian healthcare is not yet visible — was available in the monitor at headline level only (headline-level reference only), so its content was not processed.

6.2 Facts and data

Data Value Source
The submission and length of the amending proposal 1 September 2026, 125 pages Portfolio, 1 September 2026
The start of the general debate 8 September 2026 Portfolio, 8 September 2026
Original 2026 deficit (ESA) 3,600 billion HUF Portfolio, 2 September 2026
Amended 2026 deficit (ESA) 6,900 billion HUF Portfolio, 2 September 2026
Primary deficit (without interest expenditure) 3.6% Portfolio, 2 September 2026
Size of the Contingency Fund 500 billion HUF; 0.54% of GDP; 7% of the amended cash-flow deficit Portfolio, 2 September 2026
The offsetting of the Contingency Fund 400 billion HUF of realised savings + 300 billion HUF of prescribed payments from budgetary institutions Portfolio, 2 September 2026
The estimated budgetary burden of the Paks shutdown 50–95 billion HUF a month (the Ministry of Finance’s estimate) Portfolio, 2 September 2026
Expenditure appropriation of the Health Insurance Fund original 4,945 billion HUF → amended above 5,112 billion HUF Portfolio, 1 September 2026
The actual 2025 outturn of the Health Fund 4,902 billion HUF (the amended appropriation is +210 billion HUF against this) Portfolio, 1 September 2026
Curative-preventive fund original 2,886 → meanwhile amended 2,955 → new amendment 3,004 billion HUF Portfolio, 1 September 2026
High-value pharmaceutical financing 195 → 243.3 billion HUF Portfolio, 1 September 2026
Medicine subsidies 434 → 474 billion HUF Portfolio, 1 September 2026
General practitioner care and ambulance service 296.5 and 45 billion HUF respectively — both unchanged Portfolio, 1 September 2026
The yield of the global government bond index 3.72% (beginning of September 2026) — the highest since 2008 Telex, 7 September 2026
Government debt of the western countries as a share of GDP 2007: ~70% → 2025: ~110% Telex, 7 September 2026

Two items in the table require a separate note. The sources give differing values for the original deficit — Portfolio an ESA deficit of 3,600 billion forints, 444.hu a figure of around 4,200 billion forints corresponding to 3.7 per cent of GDP — because they use different accounting approaches and reference points; the table follows the ESA-based series for the sake of internal comparability. And the size of the health surplus is not in itself a single number: it depends on whether we measure it against the original appropriation (+167 billion), the actual 2025 outturn (+210 billion) or the level of the curative-preventive fund (+49 billion, or +88 billion against the 2025 actual). This is precisely the starting point of MIAK’s proposal.

6.3 Policy dimensions

  • Economy (programme points) — the data-basedness of budgetary planning and the rule-basedness of the reserve: G1 (data-driven budget), G15 (counter-cyclical fiscal stabiliser), G20 (subsequent impact assessment), G21 (spending review) and G23 (debt sustainability framework) together provide the skeleton of the proposal;
  • Healthcare (programme points) — measuring the effect of the additional resources: E3 (waiting list transparency) and E4 (prevention data programme) provide the two data systems from which the outcome indicators can be produced;
  • Transparency and anti-corruption policy (programme points) — the publicity of the use of the envelope: the A1 public money dashboard is the technical implementation of the itemised accounting of the Contingency Fund.

6.4 Literature in detail

6.4.1 Kornai János: A hiány (Economics of Shortage)

Kornai describes the hardness of the budget constraint not as a legal but as a behavioural category: what matters is what the decision-maker expects for the future. If they expect the loss to be made good by a tax concession, a state grant, deferred repayment or an extraordinary loan on soft conditions, then the constraint loses its regulating force. In Kornai’s formulation:

“The soft budget constraint — in contrast with the hard one — is unable to act as an effective behavioural constraint, but exists merely as an accounting relationship.”

The author also adds that the hardness of the constraint is not binary: there are intermediate degrees, and if the frequency of events creating an impression of softness passes a critical value, the general expectation develops that judges the constraint to be soft.

In the case of the Contingency Fund this means that the question is not the existence of the envelope but what expectation it creates. A reserve tied to a threshold value fixed in advance and activating automatically hardens the constraint: chapter managers know that they cannot count on case-by-case rescue. An envelope opened with the phrase “other unforeseeable cause”, by contrast, produces exactly the expectation Kornai describes — that managing within one’s own envelope is not a matter of life and death, because the shortfall can be made up from elsewhere. MIAK’s activation rule proposal is therefore not an administrative extra: it decides the operating logic of the envelope.

📖 Source: Kornai János: A hiány (Economics of Shortage)

6.4.2 International Monetary Fund: Fiscal Monitor — Health spending

The IMF volume starts from the observation that alongside high and rising government debt, ageing societies and growing interest burdens, governments can achieve results not by increasing total spending but by improving the structure and efficiency of spending. The report gives a quantified yardstick for this:

“Spending efficiency gaps persist. These gaps represent the difference between the actual outcome of public spending and the best outcome attainable from the same resources. The gap currently stands at some 31 per cent in advanced economies, 34 per cent in emerging markets and 39 per cent in low-income developing countries.”

The report also names the conditions for closing the gap: institution-building, curbing corruption, strengthening transparency and accountability through spending control mechanisms and the publication of budgets, and introducing multi-annual planning frameworks.

In the case of the Hungarian additional health resources this provides the yardstick for MIAK’s proposal. If the efficiency gap is around 31 per cent even in advanced economies, then the actual yield of the 210 billion forint surplus may scatter across a wide band — and which end of the band it stands at is decided by whether performance measurement is attached to it. On the report’s logic, therefore, MIAK’s three proposed outcome indicators are not an alternative to expanding resources but the condition of that expansion turning into care.

📖 Source: International Monetary Fund: Fiscal Monitor — Health spending

6.4.3 Carmen Reinhart – Kenneth Rogoff: This Time Is Different

On a database of sixty-six countries spanning eight centuries Reinhart and Rogoff show that sovereign defaults and financial crises are not exceptional but recurring events, and that the periods preceding crises are consistently accompanied by the same pattern of thinking. The authors call this the “this time is different” syndrome:

“The prevailing view today is that countries and lenders alike have learned from their mistakes. Thanks to better-founded macroeconomic policy and more prudent lending practice — so the argument runs — the world is hardly likely to see another great wave of defaults. Such celebration may, however, be premature.”

The authors add: technology has changed, fashions have changed, but the capacity of governments and investors for self-deception appears constant.

For the Hungarian situation this is applicable at two points. One is the yield environment: the level of global government bond yields not seen since 2008 and the run-up in western debt levels are precisely the external environment in which, on the Reinhart–Rogoff data series, borrower optimism is most expensive. The other is internal: the period after a change of government, when market confidence is extended in advance, is typically the moment when it is easiest to defer rule-based constraint — since there is precisely now no compulsion to accept it. MIAK’s proposal is therefore also a function of time: the activation rule has to be written when the envelope is not yet being used, not when its use has already become disputable.

📖 Source: Carmen Reinhart – Kenneth Rogoff: This Time Is Different

6.5 International comparison

A budgetary reserve of free use is not a Hungarian peculiarity, and international practice shows two extremes. In the rule-based model — as with the Chilean copper-price stabilisation fund or the Norwegian fiscal rule — both the filling and the use of the envelope are tied to a formula: the part of the revenue above a reference price fixed in advance goes automatically into the fund, and drawdown is linked to specified macroeconomic thresholds. In the discretionary model the government decides and control is subsequent: the legislature sees at the final accounts what happened. The EU budgetary framework is located between the two: it has flexibility instruments and reserves, but their activation is tied to a separate procedure and to the approval of the budgetary authority — the Council and the European Parliament — that is, the price of flexibility is the visibility of the decision.

The present construction of the Hungarian Contingency Fund stands closer to the discretionary model, with one important supplement: the publicity of the reallocation decision is compulsory. This is a substantive guarantee, and the Fiscal Council rightly named it as such. At the same time publicity is subsequent and at the level of individual items, while rule-boundness is prior and systemic — the two do not substitute for each other. MIAK’s proposal in practice asks that the Hungarian construction take over, alongside the present subsequent publicity, the one element of the rule-based model: the activation threshold. This step does not require the redesign of the fund, only the promulgation of the rule of use.

On the side of health expenditure the international experience is clearer. On the IMF’s analysis, increasing spending and improving spending efficiency are not alternatives but mutually reinforcing steps — closing the efficiency gap multiplies the yield of the additional resources. Those EU systems that tied an expansion of resources to a system of outcome indicators typically achieved a shift not in the level of spending but in the predictability of access: public, institution-level tracking of waiting times is in itself a steering force, because the patient and the referring doctor are able to choose.

Economy

  • G1 — Data-driven budget
  • G15 — Counter-cyclical fiscal stabiliser
  • G20 — Economic policy impact assessment system
  • G21 — Systematic review of state spending
  • G23 — Government debt sustainability framework

Healthcare

  • E3 — Transparency of waiting lists
  • E4 — Prevention data programme

Transparency and anti-corruption policy

  • A1 — Public money dashboard

Suggested new programme point: A reserve standard — for the Economy area: for every budgetary reserve a compulsory activation threshold, an upper limit reallocable by a single decision and a 30-day publicity deadline.

6.7 List of sources

Press sources (MIAK press monitor, 8 September 2026 — topic 1):

Knowledge base references (specialist books):

  • 📖 Kornai János: A hiány (Economics of Shortage)
  • 📖 International Monetary Fund: Fiscal Monitor — Health spending
  • 📖 Carmen Reinhart – Kenneth Rogoff: This Time Is Different

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme point ID: G1, G15, G20, G21, G23)
  • MIAK policy area: Healthcare (programme points; programme point ID: E3, E4)
  • MIAK policy area: Transparency and anti-corruption policy (programme points; programme point ID: A1)
  • MIAK press monitor, 8 September 2026 — topic 1, score: 96/100

Supplementary public data sources:

  • Parliament’s register of submissions — the proposal on amending the 2026 budget act
  • Fiscal Council — the opinion given on the amending proposal
  • KSH public finance data; Eurostat general government deficit and debt data; the AMECO database

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