The Hungarian government's original 2015 budget proposal included a tax of 150 forints ($0.60) per gigabyte, thus placing a great financial burden on Internet providers and ultimately their customers, who would have absorbed the costs. Public opposition to the tax led the government to amend the proposal, adding a cap of 700 forints per month for individuals and 5,000 forints per month for commercial users.
While the Oct. 28 protest and a similar demonstration two days earlier focused on opposing the tax, some demonstrators shouted slogans and carried signs pointing to other concerns regarding Orban's government, including its orientation toward Russia and moves to undermine the country's democracy. Moreover, many participants were young people who, over the past few years, have refrained from political activism. Nevertheless, whether the controversy over the Internet tax gains momentum and evolves into a significant anti-Fidesz movement that threatens the government's position will hinge upon Orban's continued ability to appeal to the voters that put him in power: middle class workers who value economic stability first and foremost.
Orban's Fidesz party was able to maintain its popularity and win re-election in 2014 because of the ideological mix of its platform, which includes appeals to Hungarian nationalism and promises to cut utility prices and taxes. Fidesz has also called for increasing taxes on foreign-owned banks and energy and telecommunications firms, as well as helping Hungarians pay back their foreign-denominated loans at lower rates. By changing the electoral law to empower its supporters, Fidesz ensured that it would retain its two-thirds majority in parliament after winning only 44 percent of the popular vote in the 2014 election. Despite the weaker performance at the polls, Fidesz has continued to derive power from a core of voters that benefits from tax cuts. This base hopes Fidesz's plans for solving the foreign-denominated mortgage crisis and bringing increasingly large sections of the economy under state control will benefit them financially.
The proposed Internet tax would harm the interests of many of Fidesz' middle-class backers, making it the latest in a series of events that have strained the party's relationship with its main support base. The development of Fidesz-linked patronage networks, as well as large-scale corruption in land distribution and in the allocation of permits for tobacco sales, has disillusioned some would-be Fidesz voters. The recent U.S. travel ban imposed on six Hungarians, some of whom are reportedly high-level officials in the country's tax authority, has further increased public wariness of government corruption.
Government officials have claimed they seek to raise only 20 billion forints (about $81 million) per year with this particular tax. For now, Fidesz leaders are refusing to meet protester demands because they believe the demonstrations will not threaten the party's position of power. The government's decision to cap the Internet tax did not satisfy protesters, who are calling for full elimination of the proposal.
As he works to maintain the party's position, Orban is facing several constraints. Fidesz must find alternative sources of revenue after pledging to keep income taxes low, even though modest economic growth is expected for the next year. At the same time, Orban is striving to maintain a good working relationship with the Fidesz oligarchs who financed his rise to power and who demand access to state resources in the form of EU funds and government contracts.
Moreover, Fidesz's limiting of media freedom and implementation of controversial economic practices as a way to consolidate power at home is jeopardizing Hungary's cooperation with EU institutions. This threatens the country's access to the European funds that the Hungarian economy and Fidesz patronage networks rely on. Hungary's continued dependence on Russian energy, as well as the recent nuclear power plant deal with Russian firm Rosatom, further limits Orban's room for maneuver.
While the political opposition to Fidesz remains relatively fragmented, the protests demonstrate that a significant number of Hungarians are willing to actively oppose the party's policies. The success of a broader anti-government movement will depend on its ability to appeal to the Fidesz voters who are becoming increasingly disenchanted with the ruling party. Orban's ability to maintain his domestic economic policies of cutting taxes and pressuring big firms — without losing access to EU funds — will play a major role in shaping the response of Fidesz voters and the future success of any significant anti-government movements.
