Na Kyung-won, who once again brought up ‘Hungary’s low birth rate measures’: 2 million won loan if you get married and debt forgiveness if you give birth

'Hungary's low birth rate measures' were used as an excuse to dismiss the civilian vice-chairman of the U.S. Committee on Low Birth Rate and Aging Society
Hungary’s birth policy card brought out again after a year: “It’s not too late”
In contrast to Korea, Hungary has seen a 29% surge in birth rate, but there are also concerns about sustainability
Former People Power Party Rep. Na Kyung-won/Photo = Rep. Na Kyung-won’s office

Na Kyung-won, former People Power Party lawmaker and former vice-chairman (ministerial level) of the Low Birth Rate and Aging Society Committee, argued, “We need to start thinking about low birth rate measures based on the Hungarian model.” Hungary is considered a representative country that has raised the birth rate through unconventional policies that alleviate young people’s worries about housing prices. However, some are concerned that although such a policy may be effective for some classes, it is difficult to guarantee its long-term effects. 

Hungary’s low birth rate measures must evolve into a ‘Korean model’

Former lawmaker Na posted on his Facebook page on the 16th, “The reason why I paid attention to the Hungarian model while working as vice-chairman of the Low Birth Rate and Aging Society Committee is very clear. “Because it was a successful policy,” he wrote. He went on to explain, “Hungary, which recorded a total fertility rate of 1.23 people in 2011, which was similar to Korea’s, recorded a total fertility rate of 1.52 people for the first time in 10 years,” adding, “This figure is nearly double the recent total fertility rate in Korea.”

He added, “People in the media or in politics say that we paid attention to the Hungarian model late, but that’s not true. “I don’t think it’s too late yet,” he said, emphasizing that “we need to seriously consider measures to address the low birth rate based on the Hungarian model from now on.” Former lawmaker Na, who said that the Hungarian model of low birth rate measures should be evolved into the ‘Korean model’, said, “When you get married, provide a loan of 200 million won at an ultra-low interest rate of 1% per year for 20 years, and one-third of the principal for each child you have. “My idea is to write it off,” he explained.

In addition, he expressed his ambition, saying, “If you are allowed the opportunity to work in the 22nd National Assembly, my first legislative activity will be an unconventional but at the same time effective measure to address the low birth rate,” and “I will take responsibility for that and persuade the ruling party and the opposition party.” . Previously, former lawmaker Na announced these measures at a press conference in January last year when he was vice-chairman of the Low Birth Rate and Aging Society Committee, but he expressed his gratitude to President Yoon Seok-yeol when the President’s Office staff criticized them directly, saying that there was a significant difference from the government’s policy stance.

Fertility rate rises to 1.52 by alleviating concerns about housing prices through ultra-low-interest loans and debt forgiveness

The ‘Hungarian-style support measures’ emphasized by former lawmaker Na refer to the large-scale childbirth encouragement measures that the Hungarian government has been implementing for the past 10 years. The total fertility rate, which was the lowest ever at 1.23 in 2011, rose 23.6% to 1.52 in 2022. This is in contrast to Korea, where the total fertility rate was 1.24 in 2011, which was higher than that of Hungary, but plummeted by nearly 40% to 0.78 in 2022.

Hungary’s ‘Family Housing Subsidy System (CSOK, Csaladi Otthonteremtesi Kedvezmeny)’ provides low interest rates of 15 to 50 million forints (approximately 57 to 190 million won) depending on the number of children when a family with a married woman under 40 purchases a house. It is a loan system with a repayment period of up to 25 years. If you give birth to a second child, 10 million forints will be deducted from the principal, and if you give birth to a third child, an additional 10 million forints will be deducted from the principal.

Here, in 2019, ‘expected childbirth loan’ was also added. Regardless of the purpose, up to 11 million forints (approximately 41.8 million won) are lent for up to 20 years. If the first child is born within 5 years of the loan, interest is waived and principal repayment is deferred for 3 years. If a second child is born, 30% of the principal is written off and repayment is delayed by three years. When a third child is born, the entire principal is written off. You can also use CSOK and childbirth loan at the same time.

In addition, there are various tax benefits. If you have two children, you can receive an income tax refund of 40,000 forints (about 150,000 won) per month, and if you have three children, you can receive an income tax refund of 100,000 forints (about 380,000 won). In Hungary, where the average monthly income of a four-person household is about 590,000 forints (about 2.2 million won) as of 2021, this is by no means a small amount. Women with four or more children are exempt from lifetime income tax (15%).

The satisfaction level of Hungarian citizens is generally high. Kesher Bunder, 34, who was on parental leave after working as a kindergarten teacher, borrowed 10 million forints as a loan due to give birth in January 2021. With the birth of her first child in 2022 and her second child last year, 30% of her principal was forgiven, and repayment was deferred for six years. Kesher said, “Recently, housing prices in Hungary have risen a lot, and thanks to a loan, I was able to buy a new house. I also plan to have a third child.”

However, there are voices questioning the sustainability of this Hungarian method. Hungary’s fiscal deficit last year amounted to 5.9% of gross domestic product (GDP), and much of it is believed to be due to low birth rate measures. In relation to this, Lee Cheol-hee, head of the population cluster at Seoul National University’s National Future Strategy Institute (professor of economics), said, “Cash support may be effective for some groups who are worried about having children, but the long-term effect cannot be guaranteed,” and added, “Referring to the Hungarian policy, we can understand our situation. “We need to think about appropriate measures to address the low birth rate,” he said.

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