A referendum was held in March 2008 on whether to abolish doctor visit and hospitalisation fees in the health service, as well as tuition fees in higher education. The referendum resulted in an overwhelming victory for the opposition party, the Alliance of Young Democrats, which initiated the referendum against the government’s plan to introduce co-payment schemes. Thus, the outcome of the referendum represented a devastating failure for the governing socialist-liberal coalition.
Political background
The referendum on abolishing medical and higher education fees was initiated by the two major opposition parties – the Alliance of Young Democrats–Hungarian Civic Party (Fiatal Demokraták Szövetsége–Magyar Polgári Szövetség, FIDESZ-MPSZ) and the Christian Democratic Peoples’ Party (Keresztény Demokrata Néppárt, KDNP). It was first proposed on 23 October 2007 at a mass demonstration commemorating the anniversary of the 1956 revolution. On the same day, anti-government riots took place once again on the streets of Hungary’s capital city of Budapest. The dramatic decline in the government’s popularity was caused by the fact that, following the elections, the re-elected socialist-liberal government revealed that the current budget deficit was particularly high and announced a severe cost-cutting economic programme to restrict public budget spending. Unpopularity turned into anger among the public when a speech to be given by the Prime Minister, Ferenc Gyurcsány, was leaked, in which he stated that the government had ‘lied day and night’ about the state of the country’s economy in the run-up to the general election and only imitated the operation of a proper government (HU0610039I). Following the revelation, FIDESZ refused to recognise the legitimacy of the government and interpreted the outcome of the referendum as a vote of no confidence in the government.
The referendum proposal originally contained seven issues requiring attention. However, after more than a year of intense legal debate over the constitutionality of deciding about such issues in a referendum, only three remained in the proposal. The debate on whether to subject the questions to a referendum caused serious conflict between the National Election Committee (Országos Választási Bizottság, OVB) and the Constitutional Court (Alkotmánybíróság, AB), as the Hungarian Constitution does not permit a popular vote on budgetary issues. Surprisingly, however, the AB ruled that it is constitutional to hold a referendum on these issues and that the parliament would be obliged to make legislative measures based on the outcome. The AB then called for the OVB to begin the administrative preparations for a referendum. Besides the right-wing opposition parties, a number of trade unions also supported the idea of the referendum, particularly the Democratic League of Independent Trade Unions (Független Szakszervezetek Demokratikus Ligája, LIGA) and the National Federation of Workers’ Councils (Munkástanácsok Országos Szövetsége, MOSZ). Several federations in healthcare and education were also supportive of the referendum, including the Democratic Union of Healthcare Employees (Egészségügyi és Szociális Ágazatban Dolgozók Demokratikus Szakszervezete, EDDSZ), which is the main trade union in the healthcare sector. A number of professional organisations in the healthcare sector also confirmed their support.
Political campaign before referendum
In the run-up to the referendum, the Hungarian Socialist Party (Magyar Szocialista Párt, MSZP), the leading party in the government coalition, was aware that it had little chance of winning the popular vote, but hoped that voters’ apathy would render the referendum void. Voter turn-out at referendums has traditionally been low in Hungary. In order for a referendum to be valid, at least a quarter of the electorate must vote the same way. Thus, in this referendum, FIDESZ needed at least 2,011,722 ‘yes’ votes agreeing with the abolition of the doctor visit and hospitalisation fees and opposing the higher education tuition fees to win the referendum. FIDESZ had invested significant effort into its campaign and the President of the party, Viktor Orbán, had toured the country to generate support in the weeks preceding the referendum. FIDESZ also successfully rallied non-governmental organisations (NGOs), professional organisations and trade unions to argue that co-payment would further aggravate the situation of people who are less well off in society. Moreover, FIDESZ argued that the ‘yes’ vote would be a legitimate way to express the ‘anger of the people’ and their strong disillusionment with the government’s plans. In support of its arguments, FIDESZ used the slogan ‘The future begins with a “yes”’ to campaign for the abolishment of the three unpopular fees, a move which eventually proved effective.
Referendum results
The referendum held on 9 March 2008 resulted in the abolition of the doctor visit and hospitalisation fees in healthcare, along with the tuition fees in higher education. As many as 4,061,015 people voted, representing about 51% of all prospective voters – a higher turnout than those recorded at the referenda on joining the EU or the North Atlantic Treaty Organization (NATO) several years ago. As many as 84.4% of those who turned up at the referendum voted against daily hospital fees, a total of 82.2% voted to scrap higher education tuition fees, while 82.4% voted to reverse doctor visit fees.
Although only slight differences emerged in the votes cast on the three issues in question, some division may be observed between the various outcomes. Analysing the results in terms of geographical distribution reveals two relevant divisions. One concerned the division between cities and rural areas, the latter being much more active during the voting and the former proving to be far more supportive of the government’s highly unpopular reforms. A second division occurred between the country’s richer western counties, which recorded a higher voter turnout, and the poorer eastern counties which witnessed fewer voters. The outcome regarding the capital city resembled the national results in that participation was higher in richer districts and more ‘no’ votes were cast in less well-off districts. On the other hand, the slight differences across the constituencies corresponded to the traditional political affiliation of their voters, a pattern which had also been forecast by opinion polls: it seemed obvious that supporters of right-wing political parties would be more inclined to cast ‘yes’ votes.
Events after referendum
The unprecedented high turnout of voters and overwhelming proportion of votes opposing the three types of fees was an unwelcome surprise for the government. Moreover, the outcome represented a huge blow for the reform initiatives of the governing parties. On the night of the referendum, the government declared that it would immediately scrap co-payment schemes and would not wait until 1 January 2009 to do so, which was the original deadline set by the referendum. The same evening, FIDESZ’s President, Mr Orbán, warned the government of being defeated in a second referendum on health insurance, due to take place in the autumn of 2008, unless it repealed the health insurance law. The second referendum, initiated by individuals with the support of LIGA, aims to prevent the introduction of a multi-insurer system; already, more than half a million signatures had been collected by March in support of this referendum, which is well above the number required to initiate a referendum (HU0802029I).
Political consequences
Conflict over reduced resources in healthcare
On 17 March 2008, the parliament approved the government’s bill on implementing the decisions endorsed by the referendum. Accordingly, the fees for doctors’ visits and hospital stays would be scrapped as of 1 April 2008, while tuition fees in higher education will not be introduced at all. The government estimated that the withdrawal of the fees would mean a reduction in resources of HUF 20 billion (about €79 million as at 8 May 2008) a year for healthcare institutions, especially for general practitioners. Moreover, it announced that it would not compensate fully for the loss of co-payment resources, arguing that the AB had approved the referendum on the co-payment scheme based on the reasoning that it would affect the budget. Nonetheless, the threat of the Hungarian Chamber of Physicians (Magyar Orvosi Kamara, MOK) to boycott the state-run National Health Insurance Fund (Országos Egészségbiztosítási Pénztár, OEP) forced the government to review its position and begin negotiations with MOK on the method and extent of compensation.
FIDESZ re-evaluates its position
The referendum caused unexpected turmoil in the Hungarian political scene. FIDESZ and its president have moved back towards the political centre and toned down their rhetoric, after years of courting the extreme right wing – a policy that contributed to the party’s defeat in two previous general elections. At the same time, the opposition, pursuing a left-wing style propaganda, seized the opportunity to attract many disillusioned socialist voters and capitalise on the loss of confidence in the government. Meanwhile, leading economists called for a drastic cut in spending on welfare and also for tax cuts, in order to regain the competitiveness of the Hungarian economy.
Dramatic decline in government support
The particularly high proportion of ‘yes’ votes against the government’s reform initiatives has had shocking consequences. The government’s popularity sank lower than ever, and it was estimated that an important fraction of left-wing voters withdrew their support for the government. The latest opinion polls have indicated low support for MSZP, which received 16% of votes compared with 39% for FIDESZ. The results also caused a crisis situation in the ruling coalition, partly provoked by the fact that LIGA called on the government to revoke the health insurance law by early April 2008 or the referendum would be inevitable. Under such political pressure, MSZP reconsidered its position and announced that it was ready to withdraw the law and end large-scale reforms in healthcare and education. However, the junior coalition partner, the Alliance of Free Democrats (Szabad Demokraták Szövetsége, SZDSZ) urged the government to initiate further reforms to reduce social spending in order to make way for tax cuts. The diverging responses of the parties in the coalition led to its break-up. SZDSZ decided to withdraw from the coalition and its ministers announced that they would leave the cabinet by the end of April. The liberals promised to support a minority socialist government in parliament only on a case-by-case basis. Nonetheless, commentators do not predict that a minority government will remain long in office, due to the political splits between the two major parties and the persistent troubles in the economy. Opposition parties want to see early general elections.
Commentary
The referendum, supported by a number of trade unions, led to a government crisis and the loss of reform momentum. At the same time, FIDESZ is calling on the government to give back to the people the right to decide and, in particular, for the resignation of the government and new elections. Meanwhile, the ongoing political turmoil is threatening the EU convergence programme, which foresees further years of strict economic policies in order to reduce the budget deficit and inflation. This referendum may result in a severe setback for Hungary in reaching the Maastricht criteria for joining the eurozone, as the weakened and defeated government would not have the courage to carry out the necessary reforms. Moreover, the heated and controversial times in national politics are likely to have a resulting impact on industrial relations. In particular, the need for strict government spending and, at the same time, the political constraints on large-scale reforms are likely to lead to further conflict in the public sector, where trade unions are the strongest.
Márk Edelényi, András Tóth and László Neumann, Institute for Political Science, Hungarian Academy of Sciences