Referenda on granting citizenship to ethnic Hungarians living outside Hungary and on whether healthcare institutions should be privatised were held in December 2004. Both were rendered void by low turn-out. The social partners took a variety of views on the issues.
National referenda were held on two issues on 5 December 2005: granting citizenship to ethnic Hungarians living outside Hungary; and on whether hospitals and other health service institutions should be privatised. The referenda were held on the initiative of the Workers’ Party (Munkáspárt), the Communist Party and the World Federation of Hungarians (Magyarok Világszövetsége, MVSZ) - an organisation for ethnic Hungarians living abroad - which collected more than 200,000 signatures in favour of them.
The Workers' Party initiated the health service referendum after a law was passed regulating healthcare privatisation. The referendum was held despite the fact that this law had been annulled by the Constitutional Court due to procedural errors. MVSZ initiated the referendum on granting citizenship automatically to ethnic Hungarians living outside Hungary who are citizens of other states. About 3 million to 4 million ethnic Hungarians live in neighbouring countries, most notably in Romania - perhaps as many as 1.5 million in Transylvania - as a result of the break-up of Greater Hungary by the Treaty of Trianon in the wake of the First World War.
The call for referenda gathered momentum when the right-wing Alliance of Young Democrats-Hungarian Civic Party (Fiatal Demokraták Szövetsége-Magyar Polgári Szövetség, FIDESZ-MPSZ), the major opposition party, decided to champion both causes. Proponents of 'reuniting the nation' and maintenance of a public health service conducted a fierce campaign. At the same time, the Hungarian Socialist Party (Magyar Szocialista Párt, MSZP), the major party in the ruling coalition, supported a 'no' vote on both issues. The Alliance of Free Democrats (Szabad Demokraták Szövetsége, SZDSZ), the junior party in the governing coalition, also called on voters to reject the motions. Moreover, the Prime Minister publicly announced that he would vote 'no' on both issues, and advised citizens simply to stay at home.
In its campaign, the government emphasised the potential costs of both measures. A 'yes' vote for citizenship might lead to a huge wave of immigrants seeking social benefits and jobs, it claimed. To grant citizenship, the government argued, would cost the state budget an additional HUF 500 billion (EUR 2 billion) annually, 2.5% of GDP. As many as 800,000 people might choose to immigrate to Hungary: according to government calculations as few as 100,000 such immigrants would add HUF 14,400 to annual income tax per capita. The government also claimed that some of those granted Hungarian citizenship would continue to live outside Hungary but would occasionally visit to take advantage of free public services, increasing government expenditure by HUF 250 billion.
Another government argument was that granting citizenship would have a major impact on the labour market. According to the Ministry of Employment and Labour (Foglalkoztatáspolitikai és Munkaügyi Minisztérium, FMM), there are only 25,000 to 30,000 job vacancies in Hungary (this may be the number of vacancies registered with state job centres), so immigration is likely to overburden the labour market. The Minister of Employment and Labour also stated that immigrants would depress wages, while not ceasing to work illegally. According to his calculations, 100,000 new jobseekers on the Hungarian labour market would endanger the jobs of 80,000 current employees and possibly increase unemployment to 7.5%-8%.
FIDESZ, by contrast, argued that granting citizenship would not cost anything. To vote 'yes' was largely a moral issue, it stated, the primary purpose of which would be to give ethnic Hungarians a Hungarian passport and enable them to travel freely to Hungary and visit relatives there.
As far as privatisation was concerned, the governing parties stated that, apart from the fact that the law in question had already been annulled, the healthcare sector badly needed additional investment from private investors.
According to the relevant law, a referendum is valid only if the turn-out is at least 50%, or if 25% of the eligible voters vote for or against. In the double referendum held on 5 December 2004, only 37.49% of the eligible voters turned out. Of these, 51.57% approved the proposal on citizenship, but this represented only 18.9% of the electorate. In the referendum on privatisation of healthcare institutions, 65.02% of the votes supported a continued block on privatisation, but since this represented only 23.89% of the eligible voters. that vote was also invalid. The failure of the citizenship referendum defused tensions that had arisen between Hungary and neighbouring countries which were angered by the proposal, calling it provocative and intrusive.
The social partners tried not to get involved in the highly politicised debate on citizenship. Nonetheless, some employers' representatives, most notably the president of the Hungarian Chamber of Commerce and Industry (Magyar Kereskedelmi és Iparkamara, MKIK), highlighted the current shortage of skilled workers in the labour market and the consequent wage pressure, which he said was harming competitiveness. As for the trade unions, three pensioners' associations, among them the pensioner sections of the National Association of Hungarian Trade Unions (Magyar Szakszervezetek Országos Szövetsége, MSZOSZ) and the Trade Union of Hungarian Railway Workers (Vasutasuk Szakszervezete, VSZ) warned citizens in a leaflet that a 'yes' vote would threaten future pension increases. In relation to the referendum on healthcare privatisation, the Democratic Union of Healthcare Employees (Egészségügyi és Szociális Ágazatban Dolgozók Demokratikus Szakszervezete, EDDSZ) and the Hungarian Chamber of Physicians (Magyar Orvosi Kamara, MOK) staged a demonstration in front of the parliament building calling for a 'yes' vote.