By Krisztina Than and Gergely Szakacs

BUDAPEST (Reuters) -Hungary’s government will refund $2 billion of income tax to families in early 2022 and also plans a big hike in the minimum wage, right-wing Prime Minister Viktor Orban told the opening session of parliament on Monday, setting the stage for next year’s election.

Orban is facing a parliamentary campaign that promises to be competitive for the first time since a decade. Orban said that because of the economic rebound following the coronavirus outbreak, there was enough money in the budget to fund the necessary measures.

In a surprise bond issue, Hungary raised 4.4 billion euro on the international markets to finance rising costs and to offset a possible delay in getting European Union COVID-19 money.

Orban already gave out handouts to the electorate, including large home-renovation grants. Last week, Orban extended a moratorium for loan repayments for those in need until 2022.

According to Orban, the economy is expected to grow at more than 5.5% and there will be a shortage in labour.

Next February, the government will send tax refunds out to all households. These payments will not exceed the income tax that is paid for someone making the average salary.

Orban said that 600 billion Forints ($2 Billion) will be refunded by the tax authorities to 1.9 Million parents. Orban was using a electoral strategy borrowed from Law and Justice, his populist and nationalist Polish party.

Poland’s ruling party introduced a plan that provided 500 zlotys per child to families and exempted all people below 26 from income tax.

Orban said that the personal income tax exemption for individuals under 25 years old will go into effect next year.

In response to the rising inflation, pensioners will be eligible for an extra payment.

The minimum wage would rise to 200,000 from 167.400, which is currently the case. However, he said that discussions with employers are ongoing and that there was a good chance of reaching an agreement.

The wage rise was long overdue according to the opposition parties, who sharply criticised government officials for rampant corruption, rising prices, and widening the wealth gap.

Peter Jakab from the Jobbik Party, said that three things had changed in Hungary ….Your luxury, size of yachts, and poverty. “Prices are very high.”

Four opinion polls were conducted in August and found that Orban’s Fidesz is running neck-and–neck with the wide alliance of opposition parties. Although no date has yet been established, the election will be held next spring.

Orban has been a radical in social policy, protecting what he believes are Western liberal Christian values. He affirmed his support of a law EU leaders claim discriminates against transgender and gay people.

This law bans “display or promotion of homosexuality among children under 18 years old,” and was passed in June.

Orban explained that “we do not permit any sexual propagandism targeted at children.” ($1 = 301.8200 Forints).