When the Independent State of Croatia was proclaimed, Budak became the state's chief propagandist and Minister of Education and Faith. As such, he publicly stated that forcible expulsion and religious conversion of the ethnic Serb minority was the official national policy. Budak signed the Ustashe regime's racial laws against Serbs, Jews, and Roma.The full text of the racist law was published in Narodne novine from 4 June 1941. with and titled as "Zakonske odredbe o zaštiti narodne i arijske kulture hrvatskog naroda"</ref> Croatian novelist Miroslav Krleža described Budak as "a minister of culture with a machine gun". According to an alleged statement, reportedly said by Budak, the Ustaše plan was to "kill one part of the Serbs, evacuate another and lead over one part to Catholicism and thus transform them into Croats." The origins of this statement are unclear. According to Veljko Bulajić, the statement originates from a speech in Gospić on 22 July 1941. Other authors claim that it came in a radio broadcast, while some attribute it to Dido Kvaternik. In a report to the Yugoslav government-in-exile, the statement was attributed to Andrija Artuković. There are various versions of the quote that differ in wording. The historian Tomislav Dulić said that he "tried to find a primary source that could confirm the existence and exact wording of this statement", but was "not been able to ascertain whether such a statement actually exists".