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National Philharmonic as a Public Benefit Company

2002. 01. 18.

The Government has decided that from January, the National Philharmonic Orchestra should operate within a new, more modern economic framework as a public benefit company. Thus since January the musicians have been working as employees, and the ensemble can operate under more flexible financial conditions, because as a public benefit company [Kht in Hungarian] it can obtain government support per season, rather than per calendar year – Géza Kovács, manager of the National Philharmonic Orchestra told Világgazdaság.

“In 1998, the state concert organising company, the National Philharmonia, was bankrupt, and the State Concert Orchestra and State Choir (who had operated as part of the National Philharmonia) carried on their work under the name “The National Philharmonic”, having inherited a debt of 20 million forints from its legal predecessor. The ensembles, operating as fundamental cultural institutions could at that time rely on a state subsidy amounting to 388 million forints, which that year, was raised to 500 million. Since January 2001, under the new era of special support, this sum has been 1.5 billion forints. This was necessary, because besides the low wages, the ensembles were unable to cover the costs of appearances abroad, the purchase of new instruments or to invite guest artists” continued Géza Kovács
“The government stipulated as a condition of this greater financial support that a new system of assessment be introduced at the orchestra, during the course of which the choir had to audition before a panel of experts, the orchestra members in front of an international jury, to demonstrate their abilities (VG, 2000 February 25th and May 19th). Subsequently 26 musicians departed from the orchestra, twenty by mutual consent, while a further six were dismissed.
The larger budget made it possible for salaries to be tripled and for a three tier salary system to be introduced, so that musicians could, in addition to their basic salary, receive bonuses for artistic and other meritorious achievements. In 1998 the wage of the average orchestral musician was 80,000 forints, for a choir member 44, 500. In December 2001, these figures stood at 352,000 and 255,000 forints respectively. The orchestra also succeeded in acquiring new instruments and their working conditions have significantly improved. Their chairs were replaced, which is important since musicians undertake specialised seated work. The contract for the public benefit company has been signed with its founder for an indefinite period, and can expect a further 1.5 billion forints. 9 inspections have been undertaken at the institution between 1998 and August 2001, including the State Auditing Office, and they have all judged the operation of the institutions as satisfactory – said Mr Kovács.
It is planned that in 2004, the National Philharmonic Orchestra will take possession of new premises on Soroksári Road in Budapest's Ninth District. This will be in the cultural centre under construction close to the National Theatre, where there will be rehearsal rooms and other amenities. The National Philharmonic's Concert Hall will seat 2000 people and the New York Artec firm has been commissioned to ensure excellent acoustics.

Hungary has 14 professional orchestras, of which only seven do not employ public employees. Local governments support the six provincial orchestras. Apart from  the Hungarian State Opera House orchestra, none of the capital's orchestras engage public employees. The Matáv Symphony orchestra has functioned as a foundation since 1991, and the Budapest Festival Orchestra and the MÁV Symphony Orchestras followed suit in 1994. The Hungarian Radio Orchestra began operating as a Public Liability Company in 1995.

(Világgazdaság, January 18th 2002.)