Chapter XXIV: Szuverenitásvédelmi Hivatal (Sovereignty Protection Office)

Overview

Chapter XXIV funds a single institution: the Szuverenitásvédelmi Hivatal (Sovereignty Protection Office), an autonomous state-administration body established by Act LXXXVIII of 2023 on the Protection of National Sovereignty. The chapter’s total expenditure is 6,902.8 millió Ft, with no own-revenue (egyenleg −6,902.8 millió Ft). The allocation splits into a 6,710.4 millió Ft operating budget (működési költségvetés) and a 192.4 millió Ft capital budget (felhalmozási költségvetés).

The Office is a young institution — it began operating in 2024 — and the chapter is small relative to the budget as a whole. But the size of a line is not the test. The analytical question is whether the function the line finances belongs to the set the classical-liberal frame recognises as a legitimate object of compulsory tax-financing: the protection of rights, a constitutional precondition of self-government, or a protective response to irreversible involuntary harm. The whole of this chapter turns on that single question, and the answer determines all six line items at once, because every line item funds the same institution.

Expenditure Analysis

Szuverenitásvédelmi Hivatal — what the institution does

Before classifying the line items it is necessary to be precise about the function, because the classification follows directly from it. Act LXXXVIII of 2023 defines the Office as an autonomous state-administration body — autonóm államigazgatási szerv — charged with “elemző, értékelő, javaslattevő és vizsgálati” (analytical, evaluative, advisory, and investigative) activity.¹ Its investigative remit, set out in the same statute, is to map and examine organisations whose activity, financed with support originating from abroad, “befolyást gyakorolhat a választások kimenetelére” — may exert influence on the outcome of elections — and organisations engaged in activity directed at influencing the will of voters.¹

Stated plainly, and refusing the euphemism: the Office is a state-financed body whose mandate is to investigate domestic civil-society organisations, journalists, and associations, and to publish findings about them, on the basis of the funding they receive and the political effect the state judges their activity to have. It is funded by compulsory taxation. It is not a court — it issues no binding ruling, and the Alkotmánybíróság (Constitutional Court) in November 2024 declined to strike the law down precisely on the reasoning that the Office is not a hatóság and conducts no administrative enforcement in the legal sense.² It is, in its own statute’s words, an analytical and investigative body that makes recommendations to the government.

That description is what the classification must be applied to. Three points follow.

First, the function is not rights-protection. Courts, prosecutors, and the police enforce rights against specific violations through defined legal process, subject to appeal. An investigative body that maps lawful associations and lawful journalism by reference to their funding sources and their presumed political effect does the opposite: it directs the apparatus of the state at the exercise of association and expression, which are themselves rights. The European Commission, Transparency International Hungary, and international civil-society organisations have made the rights-conflict argument at length; the European Commission referred Hungary to the Court of Justice of the European Union in October 2024 over the Act, having concluded that it breaches several provisions of EU primary and secondary law and conflicts with fundamental rights including freedom of expression, freedom of association, and the right to respect for private life and the protection of personal data.³ The point for this analysis is not the EU-law breach as such — that is a parameter of the transition path, addressed below — but the underlying mechanism: a state body financed by every taxpayer, examining the lawful political and civic activity of some taxpayers, is not protecting rights. It is the kind of discretionary state activity the classical-liberal frame treats as illegitimate at the root, independent of who staffs the body or which government directs its priorities.

Second, the function is not a constitutional precondition of self-government. The legislature, the election machinery, the courts — these finance the institutions through which a free people governs itself, and they are Keeps. The Sovereignty Protection Office is not in that set. The integrity of elections is already protected by the National Election Commission, the courts, and the Criminal Code’s provisions on electoral offences. A separate body whose function is to characterise lawful civic and journalistic activity as a sovereignty risk is not a precondition of the democratic process; it is a state actor positioned inside the contest the democratic process exists to hold open.

Third — and this is the public-choice point — the Office concentrates a discretionary power in the hands of political officeholders while spreading its cost across every taxpayer. The body decides which organisations to examine, on what timeline, and how to characterise them. That discretion is the rent. It does not matter, for this analysis, which government holds the appointment power or which organisations are examined first; the structural feature is that the state has created a surface of discretionary investigation of lawful political activity, and any holder of the appointment power inherits it. A cleaner administration directing the same body at different targets does not remove the problem. The problem is the body.

This is the deeper pattern. Both the governing and the opposition framings of Hungarian institutional reform tend to assume that the right people, in the right institutions, will produce the right outcome — that the cure for a contested or captured institution is better administrators. The mechanism here resists that assumption. A discretionary power to investigate lawful association and expression generates the same hazard regardless of who exercises it; the reform that matters is the removal of the discretionary surface, not its re-staffing. The honest classification of the chapter is therefore not “reform the Office” but “the Office should not exist.”

Személyi juttatások (Personnel Expenditures)

• Current allocation: 2,734.3 millió Ft
• Classification: Phase-Out (3 years)
• Rationale: This line funds the salaries of the Office’s staff. The function the staff perform is the function analysed above: it is not a rights-protection function, not a constitutional precondition, and not a protective response to irreversible involuntary harm. On the merits the line is a candidate for Immediate Cut. It is classified as a short Phase-Out for one reason only — the protected party is the Office’s employees, who hold employment contracts entered in good faith and have a reasonable claim to a defined transition. The classical-liberal destination is abolition; the rule-of-law method is an honest bridge for the people whose livelihoods the abolition removes.
• Transition mechanism: Severance-with-overlap. The employees keep their full state salary for a defined 24-month transition period and may take new private-sector employment during that period while keeping both incomes. The Office’s staff are analysts, lawyers, and administrators with general, transferable skills; the Budapest labour market for these skill sets has historically absorbed public-sector outflows from comparable institutional restructurings, and the private-sector re-employment path is realistic. The severance is computed on the payroll component only — see the JSON schedule. Personnel plus the associated employer contributions (the next line) together are 3,127.8 millió Ft; the 24-month severance protects this payroll subset, paid out over years 1 and 2, after which the line reaches zero.
• Affected groups: The Office’s permanent and contracted staff. Public reporting does not give a precise current headcount; the personnel envelope of 2,734.3 millió Ft implies an order of magnitude of roughly 150-250 staff at Hungarian public-sector analytical and legal salary levels, though this should be confirmed against the Office’s published staffing return before the schedule is finalised. Each affected employee receives 24 months of full salary with the right to earn a second income immediately — a transition that, named honestly, is materially more generous than the redundancy terms most private-sector workers face, and is designed so that the people doing the work are not made to bear the cost of a policy decision that is not theirs.

Munkaadókat terhelő járulékok és szociális hozzájárulási adó (Employer Contributions and Social Contribution Tax)

• Current allocation: 393.5 millió Ft
• Classification: Phase-Out (3 years)
• Rationale: This line is the employer-side social contribution (SzocHo) and other employer levies on the personnel line above. It is not a free-standing programme; it is a fixed function of the payroll. It is classified identically to the personnel line and forms part of the same payroll component for the severance calculation: a worker on severance-with-overlap continues to be a payrolled employee of the state for the overlap period, so the employer contribution continues to be paid on their salary during years 1 and 2 and falls to zero in year 3 with the rest of the payroll.
• Transition mechanism: Tied mechanically to the personnel line. Severance-with-overlap; the employer contribution is part of the protected payroll component.
• Affected groups: As for the personnel line — the contribution is paid on behalf of the same employees and represents part of the true cost of their compensation.

Dologi kiadások (Material and Operating Expenditures)

• Current allocation: 3,582.6 millió Ft
• Classification: Immediate Cut
• Rationale: This is the largest single line in the chapter — larger than the personnel envelope itself — and funds the Office’s non-payroll operating costs: premises, utilities, IT systems, services, the operation of the statutory research institute through which the Office conducts comparative legal analysis, conferences, and external procurement. Severance-with-overlap protects payroll, not the operating envelope. Office leases, supplier contracts, and IT subscriptions are counterparty contracts whose rights are honoured by contract run-off, not by employee transition; they do not justify a continuing budget line once the institution is wound down. The dologi line therefore reaches zero in the first budget cycle. The visible effect — an institution stops procuring premises and services — is the intended effect; the unseen alternative use of the 3,582.6 millió Ft is its return to the taxpayers who funded it, or its redeployment to a rights-protection function that survives the framework’s test.
• Transition mechanism: Eliminate in the first budget cycle. In-flight supplier and lease contracts run to their contractual break points and are not renewed; this is a contract-run-off cost measured in months, not a continuing programme. No new procurement is authorised.
• Affected groups: The Office’s landlords, IT and service suppliers, and external contractors, each of whom is a counterparty with contractual rights that run-off honours. No citizen’s life plan is tied to the continuation of this operating budget.

Beruházások (Capital Investments)

• Current allocation: 152.4 millió Ft
• Classification: Immediate Cut
• Rationale: Capital investment in equipment, IT infrastructure, and similar assets for an institution that is being wound down. Capital is scarce and has alternative uses: every forint of equipment bought for this Office is a forint of saving not deployed to a project a private buyer would have selected. There is no case for new capital formation inside an institution slated for closure. The line is eliminated immediately; any assets already held are realised or transferred at the point of wind-down.
• Transition mechanism: Eliminate in the first budget cycle. No new capital commitments authorised.
• Affected groups: Equipment and IT vendors as contract counterparties; no broader affected group.

Felújítások (Renovations)

• Current allocation: 40.0 millió Ft
• Classification: Immediate Cut
• Rationale: Renovation of premises occupied by an institution scheduled to close. The classification is obvious from the mechanism: there is no case for spending on the fabric of buildings an institution will vacate. The line is eliminated immediately.
• Transition mechanism: As for Beruházások — eliminate in the first budget cycle; no new commitments authorised; affected counterparties are honoured through contract run-off.
• Affected groups: As for Beruházások — counterparties with contractual rights honoured through run-off; no broader affected group.

Aggregate treatment of the chapter

Because every line funds one institution, the chapter is best read as a single decision with a payroll-aware transition schedule. The two payroll lines (personnel 2,734.3 + employer contributions 393.5 = 3,127.8 millió Ft) are protected for 24 months under severance-with-overlap and reach zero in year 3. The three non-payroll lines (dologi 3,582.6 + beruházások 152.4 + felújítások 40.0 = 3,775.0 millió Ft) are cut immediately.

The arithmetic of the transition:

• Year 1: non-payroll lines saved in full (3,775.0 millió Ft); payroll continues as severance (3,127.8 millió Ft still paid). Net Year-1 saving: 3,775.0 millió Ft.
• Year 2: identical. Non-payroll saved (3,775.0); payroll severance still paid (3,127.8). Net Year-2 saving: 3,775.0 millió Ft.
• Year 3 onward: severance ends; the whole chapter envelope is saved. Net steady-state saving: 6,902.8 millió Ft annually.

Over ten years the chapter saves 3,775.0 + 3,775.0 + 8 × 6,902.8 ≈ 62,772 millió Ft, against a counterfactual of indefinite continuation. The severance is generous to the people who did the work and still reaches fiscal zero in the third year, because the severance protects payroll, and payroll is 45 percent of this chapter, not all of it.

The legal-constraint question, addressed honestly

A reasonable objection: the Office exists under a statute the Alkotmánybíróság has examined and declined to strike down,² and the governing majority has shown no intention of repealing it. Does that make the chapter a Keep?

It does not. Current Hungarian law is a parameter of the transition path, not a default for classification. Act LXXXVIII of 2023 is an ordinary statute, amendable or repealable by simple parliamentary majority. The Constitutional Court’s November 2024 decision found the challenged provisions not unconstitutional; it did not find them constitutionally required. A reform programme that recommends repealing the Act and winding down the Office is acting entirely within the space the legal order leaves open to a legislature. The institute’s recommendation is exactly that: repeal Act LXXXVIII of 2023, and classify the funding chapter for an honest, payroll-protected wind-down. The European Commission’s referral of the Act to the Court of Justice of the European Union³ is, on this reading, a further reason the line will not endure unchanged — but the classical-liberal case for abolition does not rest on the EU-law breach. It rests on the function: a tax-financed body that investigates lawful association and expression is not a function compulsory taxation should finance, whichever court reaches that conclusion first.

Revenue Items

The chapter records no revenue. Each of the three budget aggregates — hazai működési költségvetés, hazai felhalmozási költségvetés, európai uniós fejlesztési költségvetés — shows 0.0 millió Ft on the bevétel side, and the chapter total is 0.0 millió Ft revenue against 6,902.8 millió Ft expenditure. There are no fees, charges, or EU transfers to document. The Office is funded entirely from general taxation, which is the analytically relevant fact: there is no voluntary-payment or fee-for-service element anywhere in its financing. Every forint it spends is a forint taken compulsorily from a taxpayer, with no part of the sum reflecting any citizen’s voluntary decision to fund the activity.

Chapter Summary

Classification	Count	Total (millió Ft)
Immediate Cut	3	3,775.0
Phase-Out	2	3,127.8
Nominal Freeze	0	0.0
Keep	0	0.0
Total	5	6,902.8

Revenue	Total (millió Ft)
Total chapter revenue	0.0

Note: the chapter table presents six kiemelt előirányzat rows, but the working költségvetés is organised as five substantive line items (the két subtotal headings — Működési költségvetés and Felhalmozási költségvetés — are organisational, not separate allocations). The five items are personnel, employer contributions, material and operating expenditures, capital investments, and renovations.

Key Observations

• The entire chapter funds one institution, so the chapter is a single classification decision. The analytical question — does a tax-financed body that investigates lawful association, expression, and journalism by reference to funding sources and presumed political effect belong to the set of legitimate compulsory-tax-financed functions — has one answer, and it determines all five line items.

• The function is not rights-protection, not a constitutional precondition, and not a protective response to irreversible involuntary harm. Election integrity is already secured by the National Election Commission, the courts, and the Criminal Code. A separate investigative body positioned inside the political contest is not a precondition of that contest; it is a participant in it, financed by every taxpayer including those whose lawful activity it examines.

• The public-choice structure is the load-bearing point. The Office holds a discretionary power to select which organisations to examine and how to characterise them. That discretion is the hazard, and it is invariant to who holds the appointment power. A reform that re-staffs the body, or redirects it at different targets, does not remove the problem; only removing the discretionary surface does. This is the pattern where the administration question is downstream of the allocation question — changing the administrators leaves the rent-generating structure intact.

• The transition is payroll-aware, not a uniform glide. Payroll (3,127.8 millió Ft, 45 percent of the chapter) is protected for 24 months under severance-with-overlap because the protected party is employees with transferable skills; the non-payroll envelope (3,775.0 millió Ft, 55 percent of the chapter) is cut immediately because counterparty contract rights are honoured through run-off, not through a continuing budget line. The chapter reaches full fiscal zero in year 3 and saves on the order of 62,772 millió Ft over ten years against indefinite continuation.

• Current law does not make the chapter a Keep. Act LXXXVIII of 2023 is an ordinary statute, repealable by simple majority; the Constitutional Court found its challenged provisions not unconstitutional but did not find them constitutionally required. Repeal of the Act is within the ordinary recommendation scope of a reform programme, and the European Commission’s 2024 referral to the Court of Justice of the European Union is independent confirmation that the line is unlikely to endure unchanged.

Sources

Footnotes

1. 2023. évi LXXXVIII. törvény a nemzeti szuverenitás védelméről. Nemzeti Jogszabálytár (njt.jog.gov.hu). 2023. https://njt.jog.gov.hu/jogszabaly/2023-88-00-00. Section 1 defines the Hivatal as an “autonóm államigazgatási szerv” conducting “elemző, értékelő, javaslattevő és vizsgálati tevékenységet”; Section 3 charges it with mapping and examining organisations whose foreign-funded activity “befolyást gyakorolhat a választások kimenetelére” and “a választói akarat befolyásolására irányuló tevékenységet folytatnak.”
   ↩ ↩²

2. Nem alaptörvény-ellenesek a Szuverenitásvédelmi Hivatalról szóló törvény támadott rendelkezései. Alkotmánybíróság (Constitutional Court of Hungary). 2024. https://alkotmanybirosag.hu/kozlemeny/nem-alaptorveny-ellenesek-a-szuverenitasvedelmi-hivatalrol-szolo-torveny-tamadott-rendelkezesei/. The Constitutional Court rejected Transparency International Hungary’s constitutional complaint, reasoning that the Office is an autonomous state-administration body, not a hatóság, and conducts no administrative enforcement in the legal sense. ↩ ↩²

3. The Commission decides to refer HUNGARY to the Court of Justice of the European Union considering its national law on the Defence of Sovereignty to be in breach of EU law. European Commission press release IP/24/4865. 2024. https://ec.europa.eu/commission/presscorner/detail/en/ip_24_4865. The Commission concluded the Act breaches several provisions of EU primary and secondary law and conflicts with fundamental rights including freedom of expression and information, freedom of association, and the right to respect for private life and the protection of personal data. ↩ ↩²