Határtérségek népesedési viszonyai a rendszerváltás után



How Culture is financed in Hungary?

dr. Zoltán Rapp[1]

Abstract

Culture in Hungary is dominantly financed by the state. The state appears in different role as a donor. Old patterns from the socialist era are existing together with the most liberal ones. This mixed structure is not effective enough. There are too many decision makers, who do not want to give up their authority. The state budget is on the change from year to year. Cultural entities can not make financial plans for longer than one year. Their existance is on stake always. Part of the solution could be the effective utilization of lottery incomes, like in the United Kingdom.

The Role of the State

Hungary as an EU member cannot resist the effects of globalisation. It is vital for Hungary to preserve its competitiveness in market economy. A main factor in it is the creativity of our people, which is to be maintained and developed by more and effectively used support from the state to education, research and development and culture. These are key building blocks of our future success on the market.

If a government is aware of the importance of culture it is still a question, what form will it choose to channel the support to the cultural entities. Nobody has ever seen an artist, a writer wholeheartedly accepting the interference of the donor. Sovereignty for an artist is an important value; no one is ready to sacrifice it easily. We can sum up numerous examples from the last forty years of Hungary. Remember the so-called “red tail”, the optimistic end of several books or films (like “The Witness”). This is not a peculiarity of Hungary, check Moliere’s Tartuffe, the role of the “good king” or the scene in the Would-be Gentleman, where the Turks are negatively characterised, as demanded by politics at that time.[2] If the state has a word at each phase of construction, if the role of the state is full of ideology,[3] the result is awful many times.

While the state is financing the cultural activities – what would be the ideal role for it? There are four basic roles[4]:

0. “Supporter”: a liberal approach, the state plays practically no direct role in running the cultural institutions. The form of support is a tax waiver for non-profit institutions and private donations.

0. “Patron”: direct state support exists, but the distribution is managed by an organization, which is totally independent from the government.

0. “Manager”: some institutions are maintained by the state while others are supported. The state itself is acting on the market of culture, both as buyer and financial supporter.

0. “Supervisor”: the state is to drive and control each phase of cultural life, politics and ideological concerns are the driving forces.”

The role of the “supervisor” dominated the Hungarian cultural life till the end of 90’s. Moderate changes took place before 1989, as the state acted as a “manager” in some cases. From the early 90’s two roles were dominant in the sphere: the “manager” and the “patron”. Logically we could have expected the “manager” to become more and more dominant, but the facts showed different. A flagrant example was the proposed state budget of 1999, which intended to eliminate the National Cultural Fund[5] (NCF), which had served effectively as a “patron” financing cultural activities. As a result of the parliamentary debate the possibility of independent decision-making was severely cut back. Instead, the Cultural minister gained authority over 50 % of the Fund’s budget.

Some elements of the “supporter” model also appeared, like the tax waiver of donations. Has the “supervisor” totally disappeared in the meantime? No, especially the cultural institutions of national importance have suffered the interference of various officials into their daily operation several times.[6]

We cannot decide, which role gives the maximum result, which would be the ideal pattern. We presume, that there is no single model to solve each problem. We do hope, that nobody wishes to promote the government in the “supervisor” role. How can we evaluate the current Hungarian model with its mixed structure? It is obvious from the model’s structure, that it is still fitted with elements of less welcome Hungarian traditions. It is easy to recognise the existence of nepotism in the distribution of funds, heavy lobbying and chances for local “big shots” to feel themselves in authority. The consequences of restructuring the NCF could force the leading bodies to court the government.[7] The supporting role has a minimum effect today; enterprises also play a minimum role in financing cultural activities. The reason could be either that the economic strength of Hungarian companies is low or that the international companies have little ambition to donate in Hungary. On the other hand the cultural organizations are not well fitted to accept donations. They have very little management knowledge, and are not aware of its importance. „Periodicals are without publishing background and with a staff lacking marketing and business knowledge.... The basic elements of business activities should be implemented, but to do this, the resistance of the editorial staffs should be eliminated.[8]”

The state as a “patron” is not the dominant format of financing. It is hard to find any political figure in Hungary who is ready to drop the possibility of “doing a favour” to somebody or to get confirmation of his/her authority from fans. That could be the main reason for the slow rehabilitation of NCF’s structure. During the last two budget years, which were full of restrictions, the importance of personal connections with NCF executives became very important in getting the contract signed and supports transferred. We can still trace the state in the role of “manager” or “supervisor” as politicians are reluctant to let culture “go at large”. Idling examples are the problems with the National Theatre or the recent scandals around the Opera House.

The Channels of Funding

The state acts in several roles as a financial supporter of cultural activities, which is reflected in the structure of financial channels. Let us have a look at the way financial funds are transferred from the state budget to cultural organizations. It is obvious at first sight that the state uses several channels in financing culture.

We went through the budget of 2005 to find each “item” which supports culture, starting of course with the Ministry of Cultural Heritage. (2004.évi , XXIII.fejezet). Comparing with previous figures the result is not encouraging as the total value is lower than before. (All data without the supports for churches).

Table 1.: The budget of the Ministry of Cultural Heritage

|Year |Expenditure |Incomes |Budgetary Support |

|1999 |59 913,6 |7 970,3 |39 590,3 |

|2000 |67 236,4 |8 177,0 |43 681,4 |

|2001 |70 277,2 |3 591,6 |52 271,1 |

|2002 |81 364,9 |3 762,1 |60 584,0 |

|2003 |69 472,3 |5 386,6 |64 103,7 |

|2004 |83 502,6 |13 664,0 |78 725,6 |

|2005 |80 039,4 |14 922,3 |74 717,1 |

Source: State Budget of Hungary, Ministry of Finance

Chart 1: The budget of the Ministry of Cultural Heritage

[pic]

Source: State Budget of Hungary, Ministry of Finance

The main groups of the budget are:

Public Collections (National Széchenyi Library, National Library for Foreign languages, National Archives of Hungary, National Film Archives, National Museum, Ethnographic Museum, Museum of Fine Arts, National Gallery, etc.)

Artistic Institutions (Hungarian State Opera, Hungarian Theatre of Pest, Exhibition Hall, etc.).

Institutions of National Heritage (Cultural Heritage Authority, etc.)

Research and Service Institutions

Hungarian Institutes Abroad

Chapter Administrated Appropriations

include various investments, reconstructions and the support of some highlighted institutions (Palace of Arts, National Theatre, Ernst Museum, National Philharmonic Orchestra, Budapest Philharmonic Orchestra, etc.) some museums (House of Terror, Holocaust Museum). Film industry has a significant support in 2005 with an amount of 4,2 billion. A part of the media support is also here, the amounts for the Audiovisual Archives support the Hungarian State television.

That is not all. If we read carefully, we can find a lot more cultural support items.

Table 2.: Other cultural expenditures in the Budget

|in millions of HUF |2003 |2004 |2005 |

|National Assembly | | | |

|Support of the ensembles of the Hungarian State Radio |660 |660,0 |700,0 |

|Local Governments | | | |

|Libraries |630,0 |630,0 |755,0 |

|"ART" movies |500,0 |500,0 |200,0 |

|Zoo’s |410,0 |410,0 |420,0 |

|Professional orchestras and choirs |990,0 |1 000,0 |1 060,0 |

|Museums | |350,0 |330,0 |

|For Theatres | | | |

|Supporting running costs |7 000,1 |7 012,1 |7 755,2 |

|Supporting artistic activities of theatres |2 500,0 |2 250,0 |2 202,2 |

|Supporting puppet theatres |104,0 |130,0 |160,7 |

|Supporting artistic activities of puppet theatres |204,5 |236,5 |226,6 |

|Fund for theatres’ applications |605,0 |875,0 |988,0 |

|Prime minister’s office | | | |

|National Holidays |1 400,0 |1 065,0 |1 150,0 |

|Cultural fund for the gipsies |173,0 |134,1 |0,0 |

|Ministry of Interior | | | |

|Duna Palace and Publishing House |236,3 |233,0 |230,2 |

|Ministry of Foreign Affairs | | | |

|Support for educational and cultural programs for Hungarians living |1 365,0 |1 023,0 |7 248,1 |

|outside Hungary | | | |

|Ministry of Informatics and Communications | | | |

|Supporting running expenses of Millenáris Kht. |312,5 |842,2 |748,4 |

|Total |17 090,4 |17 350,9 |24 174,4 |

Source: State Budget of Hungary, Ministry of Finance

Illustrating the slight confusion of the above let us have a look at three philharmonic orchestras to see how many resources do they use to cover their expenses.

The Dohnányi Orchestra of Budafok (XXII: district of Budapest) collects support from the local government according to the service contract drawn up. They also get support from the National Cultural Fund and apply for further funds from the Ministry of Cultural Heritage. Additional funds on application were collected from Music Fund of the Local Government of Budapest. The Symphonic Orchestra of the Hungarian Radio is running on the budgeted fund allocated in the chapter of the National Assembly. The Budapest Festival Orchestra collects regular support from the Local Government of Budapest. As we saw previously, the budget of the Ministry of Cultural Heritage includes also a significant amount for the orchestra. The third element in finance is the BFO Foundation, which collects private and corporate donations to run the operation.

Even if your ensemble has a contract with the local government it does not prevent you from trouble. The main problem is in planning. An orchestra or a choir has a concert planned two to three years ahead. But you cannot make any definite financial plan as. “the detailed rules of application for funds, the decisions making process and control is to be regulated and published by the 15th of February 2005.” (ACT CXXXV.2004.5-th Amendment point 9. The support of professional orchestras and choirs). Right the same regulation goes for Art movies and museums. How can a museum plan exhibitions, sign contracts without knowing its own budget?

Evaluation of the Current System

Nothing is sure as regards the financing of culture. The channels, which feed the various entities, are numerous. What is the problem with that?

▪ The amount of a single source of support is relatively small; tehrefore it is hard to compose big scale programs on it and especially hard if the span of the program is longer than one year.

▪ Financial planning is practically impossible; the final figures of the budget are confirmed only by mid December of the previous year. The legislative process never ends earlier (except in the exceptional case of the two-year-budget). The budgets of the local governments can be formulated only in the current year. The contradiction is between the time span of concert planning and the maximum one-year financial planning. That is a real blind flight. Even the organisation of a small festival could be endangered, as the resources are uncertain.

▪ The budgetary restriction in the past two years rewrote the rules even within the running year. “Foreseen” contracts were not signed, or contracted funds were not transferred at all or with significant delays only.

▪ If you have to collect the funds from different resources, you have to know each person and organization well.

▪ Several amounts in the budget chapters hectically change from year to year.

▪

Chart 2: Changes in the chapters of budget

[pic]

Source: State Budget of Hungary, Ministry of Finance

Chart 3: Changes in supporting amounts

[pic]Source: State Budget of Hungary, Ministry of Finance

The above situation is tense enough, but the future is far from being encouraging. The state budget of Hungary faces fundamental changes, especially restrictions in the future. As a consequence the cultural organizations cannot expect any better in the coming years.

A Piece of Solution

Is there any solution? We are convinced that there is.

The National Cultural Fund has proved that the “patron” model is an effective solution for distributing support. There are some aspects in the operation of the NCF to be improved. Once the government ensures again the total independence for the NCF including its incomes (collected from the cultural contribution of enterprises) it can give a kind of stability to the cultural sphere.

On the other hand the state as a manager is a role to be reconsidered, with decisions made about. The institutions to stay under state financing need to be selected.

Why not employ the “patron” model on a wider scale? The idea comes from the UK, where the National Lottery offers a remarkable example. The right of organising lottery is a state monopoly in Great Britain as well, but the operation is in private hands. Camelot won the right to run the lottery for 7 years after heavy bidding. The result is encouraging.

Chart 4: Break down of Revenues[9]

[pic]

28 percent of the gross income is spent on Good Causes. More than 16 billion GBP is spent on different projects. One third goes on health, education and environmental protection, 17-17 percent on sports, arts, national heritage and charity each. The distribution of funds is organized by free standing bodies like The Arts Council, The National Heritage Fund, Awards for All or The Big Lottery Fund, etc. The Arts Council is funded both by the government and the National Lottery. The main goals of the Council are[10]:

▪ Supporting the artist

▪ Enabling organisations to thrive, not just survive

▪ Championing cultural diversity

▪ Offering opportunities for young people

▪ Encouraging growth

▪ Living up to our values

What about Hungary, the Szerencsejáték Rt earning huge amounts by running the lottery? 46 percent of the gross income was sent to state budget through several channels in 2003. Can anybody tell, how this 57 billion-forint amount was spent? There is no definite answer. Why we do not use this resource to thrive cultural organisations, to preserve pieces of our national heritage or to develop recreational areas in the countryside? We are convinced that this solution could serve as a life belt for cultural organisations.

Budapest, 19. November 2005.

Literature

Ministry of Finance, Költségvetés [pic] Költségvetési törvények, törvényjavaslatok

Sulinet:

Harsányi László: A magyar kulturális szféra makrogazdasági jellemzői, in Kultúragazdaságtani tanulmányok, AULA Kiadó, Budapest 2002

Szőnyei Tamás: Nemzeti Kulturális Alap: Átprogramozás, Magyar Narancs 1998. nov. 26.

Teimer Gábor: Az értelem bére - A Nemzeti Kulturális Alap tevékenysége, , Magyar Narancs 2005. aug. 25.

National Lottery (1)

National Lottery (2)

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[1] Collage of Modern Business Studies, Tatabánya email: ‹ÊË|}9:3JKâ!ì!" "!"øíÜíøØÐøIJIJIJģģģģIJIJIJIJċøÄ£Äxa,hæ¹5?CJOJPJQJ\?^JaJmH sH $hæ¹5?CJOJQJ\?aJmH sH .hæ¹5?6?CJOJ[2]QJ[3]\?]?^J[4]aJnH

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[5] Sulinet

[6] Harsányi p.155

[7] Cited by Harsányi p.156

[8]Szőnyei

[9] Harsányi p.156

[10] Szőnyei

[11] Teimer

[12] National Lottery (1)

[13] National Lottery (2)

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