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Colorful news from the economy


In this column I would like to comment upon so-called „little news” from my point of view shortly and a bit differently. I publish my writings separated from each other, with title and date, and the newest writings always will be put on the top under this introductory sentence. This way by reading the first writing the dear readers had seen before, they would know that all the following lines had been read by them before. But the possibility of reading my earlier writings again anytime will remain henceforward for my dear readers, if they would like so.

December 22, 1999 — Deadlock in the mutual agreement negotiations of the railways

The yearly recurring MÁV versus railway labor unions controversy about the salary and the collective labor agreement is now a returning conflict of the employees’ mutual agreement negotiations on interests. And the aggrieved parties of this controversy are the people and the economy of the country who can be only the impotent spectators of this. Commenting upon this piece of news I would not like to economically analyze the conflict in its entirety now because it could be really expounded only in course of a lengthy writing. And it is not really the time for this. Today’s question is whether it is possible to move from the stiffen standpoints without the significant loss of prestige or economical paralysis of any of the parties?!

Of course it does not mean that following an agreement the government, the MÁV and the involved labor unions should not solve the inside differencets of the system in the long run finally, and probably after a several month work during next year. And they would not come to a many year agreement in the strained atmosphere of the salary negotiations at the end of the year. Because both parties have numerous veracities in the debate and these can be revealed and the possible solutions can be found only in a calm atmosphere and without the intention of defeating each other. I am going to mention it without expounding the discussed thoughts and without the demand on completeness that they should show the actual contents to see whether the loss of several billions referred to by the MÁV can really give reason for that the MÁV cannot expend more money for wage increase. I.e. is it really a capital loss because if it is then even the inflation following salary offer of the management of the MÁV can be hardly justified, while an offer which exceeds the inflation is definitely an injury of the shippers. It should be revealed by comparative particulars, which are real in the world of work, what kind of relation the average salary, qualification, welfare benefits of the employees of the MÁV maintain to the comparable averages of Hungary and this way how well-established the demands can be. What compatibility is there in it if the labor unions conclude a solidarity agreement with such „joint organizations” where the employer has fulfilled the obligations towards the employees and can be only the powerless spectator of a situation which had originated from the labor dispute of another company but had resulted in its own workers’ walkout. It would be hopeless for these thoughts to be successful in the strained atmosphere of the present negotiations but it would be a mistake if, following a possible agreement, the next time they were raised would be the time of the new wage disputes at the end of the next year!

Perhaps it could be an offer of promotion from the MÁV to propose an offer that approached the labor unions but it still did not obligate to reconsider the estimate on the cost. Because the offer of the MÁV means an increase of the real income even itself if the inflation will really stay within six percents in the next year. The offer of 8.5 % can cause a relatively significant increase of the real income, taking it into consideration that, within the bounds of the estimated 4-5 %, some resources have to be assured as cover for the hardly disputably needed stopping of the economical backwardness and developments too. But for the labor unions the inflation data prognosticated by the state can hardly mean – partially by right – a proper guarantee. This way that solution raised at the next year regulation of the degree of the rise of pensions could be adapted also in this case according to which the MÁV would continue to rise the wages if the inflation would be higher then the planned six percents. I.e. the MÁV could promise to fully compensate the loss of the wages caused by that part of the inflation which was above the planned degree, in other words they would guarantee the two and a half percent increase of the real income.

This might be the base to restart from and the rest is up to the negotiating parties! …………………. Perhaps I will continue this too!

November 18, 1999 —- VAT fraud and the ignorant actor!

The court in session of that case was declared today in which the indictment was that actor Péter Benkõ, his wife (common-law wife) Ildikó Magyar and several family members of his had committed tax fraud of nearly a billion forints and other ancillary felonies. I would like to mention it in advance that I think highly Péter Benkõ as an actor and I will surely not take a stand on the object of the tax fraud itself until the final judicial decision – perhaps neither after it. On the basis of my practical experience I rightly have doubts about both the statements of the Tax Authority and the skill of the police and state attorney work done in this matter. Biz listening to the news two things are raised in me again, which might be worth thinking of.

It is more important to expound that in that case if there was a tax fraud then the dock for prisoners seemed scantily full to me. Do the Inland Revenue Office (APEH), the police and the state attorney’s office make bold to state that under the present rules of the taxation system and without interested state administrative connection a dramatic artist married couple and their family members starting their enterprise off can successfully „deceive” the computerized control mechanism developed for billions and the employers specialized in this field of the APEH by the most primitive accountancy abuses? There are no small scale enterprises in Hungary now which would not know that, according to the – formally unlawful, I think – own internal direction of the APEH, in case of re-claiming of VAT of more than a hundred thousand forints the tax authority will make a tax audit at the company before the tax refund. The definite aim of this audit is to survey the calculations and the book-keeping of the re-claiming of VAT and the contracts establishing the invoices of the re-claiming, the verity of the performances. It is professionally unimaginable for an audit like this not to take note of bogus invoices of even a few million forint VAT because in this case the contractual value is more than ten million forints. In case of an enterprise having a few ten million forint annual income in its real and visible economic work the audit does not reveal the bogus contracted background twenty-fifty times greater than the objects only if it is its explicit will. In case of such a big deviation even that cannot be supposed in good faith that the abuses were rendered possible by the lack of expertness or the negligence of the ones bound to the audit. I really consider the above-written as a very important question. Unfortunately it is rarely thought over that the degree of the Hungarian economic criminality could be repressed significantly if the repression of the „supply of corruption” was begun in the civil servant society which is always indispensable to corruption. Because the private sector does not entrust a more expensive executor with the execution of his investment of own capital just because the corrupting investor gives some of the overcharge back. It is possible to bribe, to get unjustified payments fraudulently only when the constituent, the one deciding about the payment does not pay from his own money but will get some back into his own pocket.

Also the repression of economic criminality is much more doubtful if we draw a bead on the circle of several hundred thousand entrepreneurs. Though a part of them is game for the violation of the law immediately but the majority of them can experience it day by day that their better offers succumb by turns in the tenders of the biggest principals (state, municipalities, state offices etc.) of the economy. He is a honor indeed if he does not break even after the fifth failure beside his constant economical difficulties and he does not join the more and more numerous group of the ones „obligatorily” returning some back. I acquit nor these people (ventures) but I am sure that it is not them who should bear the honoring title of principal defendant in a courtroom.

I have never heard of such an examination in the proceedings of the judicature that how earlier a „caught” lawbreaker would have got the collar for the so often hollow manipulations concocted by him in a less corrupt state administration. In this case the loss of the state could have been fractional too and also the defendants could expect a significantly lighter penalty. In the concrete case, if the judge finds against the accused ones then the actor’s wife can expect even an eight year imprisonment. The family members’ probable sentence is measurable in years too. While if the Tax Authority had revealed the unjustified being of the re-claiming of a few hundred thousand forint VAT connected to the first bogus invoice then by frustrating the satisfaction and without an actual loss the well-founded charge could be an attempted deceit and the forging of documents. There would be probable only one defendant instead of four and nor she would have to reckon with imprisonment. I am convinced that there had to be some official „instrumentality” to have a loss of about a billion, to have the number of defendants increase to four and to have the gravity of the crime be inflicted of eight year imprisonment and total forfeiture of property. But if it is this way then why are the officials not sitting among the defendants, and on the front seats? Why does that body of the Tax Authority, which was constituted for this, „forget” to search also in this field? But if they do not then do the investigating authority or the prosecuting state attorney’s office not have a feeling of want?

Now these are still questions remaining unanswered by turns. It is my definite will to collect the „one-sidedly” exposed economic crimes of the years past into a separate writing in the immediate future. Although having a corrupt tax controller collared would impede the tax fraud of fifty-one hundred ventures. The dismissal of a corrupt official decision-maker can result in legality and the preclusion of corruption for the mass of following commissions. It assures the possibility of the really best implementation which is surely cheaper with the not small corruption cost. I am sure that it would be worth to turn the – at least one – bead of the economic prosecution to the right direction!

I was thinking a lot of the next sentence. Though I consider its content as very important but I would have not really liked to connect it with a concrete case. But listening to and reading the artist’s statements I cannot leave my conviction undisputed. The ones passing judgement in the Hungarian legal practice should more safely make damning decisions against such defense where the basis of the defense is the extremely hollow declining of the responsibility. It is bad even to hear it when though the concerned one enjoyed the wealth surrounding him but he did not discover that its origin could not be their own success. He did not even think that they could hardly produce the cover of their lavish spending which outdid the scale of their enterprise even fifty times. He overestimated the incomes so twenty times, while he thought the expenditure ten-twenty times lower. It might – but not probably – be this way but then he has to answer for this „mistake”.

November 11, 1999 —- The WESTEND CITY CENTER opened today in Budapest!

The ceremonial opening of the Westend City Center will begin at 5 PM today at the Nyugati square. This entertainment center is now the biggest group of buildings of this kind in Europe. One year (let me add: even a few days) ago only a few people believed that such a monumental Investment can be realized successfully in such a short time in Hungary. Almost only Hungarian – mainly small- and medium scale – enterprises participated in the implementation.

Sándor Demján and his team have managed to do it now again.

October 27, 1999 —- The oil-mafia can be billionaire again!

At the modification of the tax laws the Parliament had adopted two motions for amendment of the representatives. They decided that from the 1st of January 2000 the 98 octane numbered gasoline could be put in circulation with two different taxes but they would have the same use value. At the same time they will initiate the product-idea of the so called „bio-diesel” which can be purchased and sold out of the circle of regies!

I have thought it many times that no real surprises can be given to me in the economy, in the corruption of the economy and politics any more. It is an old truth that who is conceited that will learn it soon that he has made a big mistake.

Those laws, which had essentially put an end to the profitability of the many billion business of the oil black market, were born after the loss of the oil-billions (acquisition for others!) with a many year delay. As a result of this the level of abuses of this field did not exceed the economical average in the few years past. So the „war” broke out in the underworld used to the significant income. But now we can calm down because our elected representatives have recognized the dangers implied in the straitened years and turned on the taps of wealth (of money).

If we preclude the stupidity as possibility in case of our representatives then we can find no other intelligible explanation nor for their proposals neither for the passed amendments. They explained the different tax contents of the gasoline 98 by that the lower taxed gasoline contained less polluting substances. It probably will not be the real star for the organized crime because the price difference between the two kinds of gasoline is so little that it would not mean a big sharing. But we can put a big bet on the constant injury of the consumers what will cause a deficiency of income for the state even where the respects of environmental protection do not state grounds for it. The loss of the state will surely be of several billions yearly. We can give a tip for the probable international disapprobation in advance about that the state grants privilege to a home company, the MOL, on the pretext of environmental protection. Because only the refineries of the MOL produce this reduced priced gasoline now.

The real star will be the bio-diesel which is not even really defined (definable) in the act. It is a foregone vision as the so-called oil-trains enter the country by hundreds. Since the law took the bio-diesel oil out of among the excise taxed products, therefore if the customs declarations would be about bio-diesel then the customs clearance could be done anywhere. And all of the tank-wagons seemingly filled with bio-diesel will contain gas oil. We will be „surprised” that the demand of gas oil of the country will drastically decrease in spite of the increasing economy, while Hungary will outstrip the United States in the consumption of bio-diesel.

I do not understand the bygones! Because I do not want to believe that the participants of the oil business are misleading already the third government so primitively! And it is even harder to believe that all of our three governments after the change of regime would be corruptible so easily! If I were the underworld I would have been afraid to come forward with this idea now, when all the country cares for the so-called oil-cases of Békés county. When almost everybody is searching for the connection of interestedness of the underworld, the police and the „tarrying politicians”. It seems that none but the brave deserve the oil(-money).

( It is a piece of news from the 29th of October that the FIDESZ has initiated to withdraw the bio-diesel amendment! It might be the publicity or something else that had led to the perception but it was a good sign to me anyway. I hope that at the voting also the MSZP and the Kisgazdapárt will persuade their dew „erred” representatives to a better comprehension!)

September 22, 1999 —- The ten-thousand billions of the oil-mafia

Last evening all of the television channels published it as a leading piece of news that, according to experts’ opinion, in the last years the members of the so-called oil-mafia had gained a profit of more then ten-thousand billion forints by the oil-acidifying, i.e. they had inflicted a damage of this much to the budget.

I myself disapprove the oil-acidifying too, just like the contemplated tax evasion and particularly the crimes of violence connected to the monopolization of the profitable market of the oil-acidifying. The media has published several thousand writings in this subject in the years past. Therefore here I pick only the latest sensation of the leading news services from among the colorful news. I am doing it also because it certainly bothers me day by day that the most important media channels publish only those facts in which the truth does not reach even the minimum level. I certainly consider it as a grave responsibility that the ones playing an important part in forming the opinion of the society sometimes keep the professional control of their announcements on an unjustly low level. I do not accept it that only the origin of the news is responsible for their contents. Also the responsibility of the publisher, the spreader is indispensable. The certain national television channels significantly corroborate a fact by publishing it. The „managing editors” certainly have to doubt sometimes too. Their task cannot be only properly visualizing the news, their limited professional control is indispensable too.

They should not enrage millions of people by such a fact, the volume of which is about fifty times the probable one, multiple of the total oil-demand of the Hungarian economy in the given period. This way such a loss could not have occured even if not even one drop of fuel had been put in circulation legally in Hungary in those years. We would become aware of it if there were ten-thousand so-called billionaires in Hungary or if there were more than a thousand people having a wealth of several ten-thousand billions. Though I would like it if many people had such a wealth in Hungary but unfortunately it is not this way! Many sport-clubs, foundations, artists, athletes etc. could experience how easy it became to find excellent sponsors. Of course it would also give a fantastic chance to the tax-police that they would meet riches possible to make them account for at every step in course of their work. It would not be hard to produce the actual facts subsequently. The demanded quantity of the certain energy sources in Hungary did not change significantly in the years past. Since the so-called oil-acidifying is presumptive only in insignificant quantities, therefore the yearly sum of the facts of the legal channels probably gives a pretty exact data about what quantity had gone through the black market in the given period. I do not know the concrete details. The probable volume of losses can reach even three-hundred billion! This loss would be just enough to try to find the participants and their helpers with real will, whether in the economy or in the state administration or in the politics. But the bombastic news hardly help this, they much rather serve as the mystical, thus impossible to reveal, appearances of the whole thing!