Hungary's ruling party is well-placed to remain in power beyond 2018

Thomson Reuters

BUDAPEST (Reuters) - Hungary's ruling Fidesz party is well-placed to win a third successive term in power in a spring 2018 election, Prime Minister Viktor Orban's chief of staff Janos Lazar said.

A survey by pollster Median published on Thursday showed Orban's Fidesz, which won a landslide election victory in 2010, was backed by 36 percent of all voters, compared with 10 percent support for far-right Jobbik and 9 percent for the Socialists. Nearly one-in-three voters remain undecided, however.

Orban has stabilized Hungary's finances using unorthodox measures such as a hefty tax on banks, but has clashed several times with European Union authorities over reforms affecting the judiciary, media and the central bank.

Lazar's remarks on Thursday were part of a 45-minute speech at a conference on how Hungary has used European Union development funds. He also outlined measures planned by the government to improve the country's worsening competitiveness.

"We run no risk in saying that Fidesz can be able to retain voters' trust at the 2018 election," Lazar said, adding that the government therefore had a "duty" to bring forth a social and economic program for the long-term.

Economy Minister Mihaly Varga, another strong Orban ally, spoke earlier of the need for a six-year program to lift wages in order to halt an exodus of workers abroad that is undermining Hungary's growth prospects. That time frame would also overlap with the next parliament.

Hungary agreed on Tuesday to raise minimum wage levels sharply but cut back on employers' payroll taxes to combat the severe labor shortage and improve competitiveness, which Lazar said had worsened "brutally" compared to regional peers.

Thomson Reuters"It is clear that the period of cheap labor has ended," Lazar said, adding that for the time being it was unclear what will replace cheap labor as Hungary's competitive advantage.

Improving competitiveness and preparations for the 2018 election will top the agenda at a government meeting early next month, he said. Hungary slipped six places to 69th in a 2016 Global Competitiveness Report compiled by the World Economic Forum.

"If we look at the figures, the pace of economic growth and the rate of competitiveness, there is no breakthrough," Lazar said. "Economic growth of 2 percent will not be enough to reverse this trend. That would require much faster, 4-5 percent growth."

He said the health care system needed reforms to ensure that Hungarians can stay in jobs longer, or the labor shortage would worsen, as demographic trends were probably past a tipping point. Reforms were also needed in primary and high school curriculums to reverse a fall in Hungarian pupils' rankings, Lazar said.

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