Hungary’s populist prime minister, Viktor Orbán, has promised that women who have four or more children will never pay income tax again, in a move aimed at boosting the country’s population.

Orbán, who has emerged as Europe’s loudest rightwing, anti-immigration voice in recent years, said getting Hungarian families to have more children was preferable to allowing immigrants from Muslim countries to enter.

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“In all of Europe there are fewer and fewer children, and the answer of the west to this is migration,” said Orbán in his annual state of the nation address on Sunday. “They want as many migrants to enter as there are missing kids, so that the numbers will add up. We Hungarians have a different way of thinking. Instead of just numbers, we want Hungarian children. Migration for us is surrender.”

Orbán’s Fidesz party won a third consecutive electoral victory last year on an anti-migration platform, and the Hungarian prime minister rarely gives a speech without presenting the upcoming years as a do-or-die battle for the future of Europe. He has voiced a hope that after elections in May, all European institutions will be controlled by “anti-migration forces”.

He has repeatedly claimed that the Hungarian-born American financier and philanthropist George Soros, a favoured target of the far right across the globe, is masterminding a conspiracy to destroy Europe by promoting mass migration.

Facebook Twitter Pinterest A participant holds up a flare during a protest against Orbán on the day of his state of the nation address. Photograph: Balázs Mohai/EPA

“The people of Europe have come to a historic crossroads,” Orbán said on Sunday, criticising the “mixed population countries” that result from allowing migration. The process was moving so quickly, he said, that the transformation of previously Christian countries into those where Christians were a minority would happen in his lifetime. “There is no return ticket,” he said.

Demographic decline is a problem in many societies in central and eastern Europe, with millions of people leaving countries such as Hungary, Poland, Romania and Bulgaria in the years after their accession to the EU for higher salaries in western Europe. This, combined with low birth rates, has contributed to shrinking populations and fuelled fears of dying communities across the region.

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Instead of looking to migration to solve the labour shortages and population decline, populist governments have rejected this option. Orbán built a wall along the country’s southern border to keep migrants out during the 2015 refugee crisis, and government-controlled media frequently links migration to moral decline and terrorism in western Europe.

As the prime minister spoke, anti-Orbán protesters gathered in Budapest for the latest in a series of rallies against the government which began in December after parliament passed a “slave law” allowing employers to demand more overtime from workers. The law is seen as another result of the demographic problems in the country, as a labour shortage means jobs cannot be filled. The political opposition to Orbán is divided, however, and the protest momentum appears to have diminished.

Orbán has declared the main focus of his current term in office to be the demographic situation, and his government launched a “public consultation” last year, mailing questionnaires with a number of leading questions about migration and family policy to every Hungarian household.

On Sunday, he announced a number of measures to support larger families in addition to the lifetime income tax break for women with more than four children. He also promised favourable mortgage terms for families with multiple children, support for families with three or more children to buy a car, and increased funding for daycare centres and kindergartens.

Additional reporting by Anita Komuves