From the 2026 budget audit
10 billion Ft to keep factories open that the market would close.
A state rescue fund for industrial operations whose revenues cannot cover their costs — locking capital and workers into uses customers would not voluntarily pay for.
Roughly 2,560 Ft per taxpayer per year — 10,234 million Ft to defer restructuring that the unsubsidised economy would already have completed.
What you see — and what you don't
The seen: the plant that stays open, the jobs that are not immediately lost. The unseen: the workers and machines frozen in an operation the market has priced unviable — and the wage rise the neighbouring unsubsidised employer cannot offer because its tax went partly to fund the rescue.
Objection
"Letting factories close destroys communities — the state has to intervene."
Answer
The subsidy does not fix the underlying problem; it suspends it and charges the taxpayer for the suspension. Restructuring, a sale, or closure redirects the same workers and capital to uses that actually cover their costs. The ordinary insolvency and restructuring frameworks exist for exactly this — and they are what every firm without a political connection relies on.
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The analyst's verdict
Factory Rescue Programme
Rationale
A "factory rescue" line is a programme to keep specific industrial operations running with public money when their own revenues would not sustain them. This is the soft-budget-constraint mechanism in its clearest form: a firm that would otherwise have to restructure, find a buyer, or close instead receives a transfer that lets it continue at its current scale. The cost is not only the 10,234.2 millió Ft. It is the capital and labour locked into an operation the unsubsidised market would reprice or release — workers and machines that a closure or sale would move toward uses customers actually pay for. The chain runs straight: if a plant cannot cover its costs from what buyers will voluntarily pay, the subsidy does not fix the underlying mismatch; it freezes it, and charges the taxpayer for the freeze. There is no reliance interest of the kind that justifies a phase-out: a discretionary rescue fund creates no contractual entitlement to perpetual rescue. The line can be closed in a single budget cycle.
Transition mechanism
Eliminate the appropriation in the 2026 cycle. Firms facing distress have the ordinary restructuring, sale, and insolvency mechanisms available — the same mechanisms every unsubsidised firm relies on.
Affected groups
Firms that would have applied for rescue support; their workers face the labour-market adjustment that a sale or restructuring brings, without the indefinite deferral the subsidy provides.
Free Society Institute
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