This is not trivial, because in Bart De Wever’s first super note in August, some fourteen billion in return effects over five years were planned with the envisaged reforms. “For example, the activation of the long-term unemployed or sick can have a positive effect on taxes and social contributions… which will not be taken into account by the Commission“, explains our expert. Who adds: “We will therefore have to seriously reconsider the calculations on the side of the Arizona parties.”
Worsening expected “with unchanged policy”
Employers and unions, in a report published this Wednesday on the state of our public finances, say nothing else. Firstly, the Central Economic Council (CCE), a body which brings together the said trade union and employer organizations, recalls that “the worrying situation of our public finances” is due to several factors, not the least of which are the significant growth in spending due to the aging of the population, the scale of public investments necessary for the ecological and digital transition, as well as military spending. , as the recent forecasts of the Monitoring Committee reminded us a few weeks ago, without changes in the policies to be implemented, the budgetary situation will deteriorate further in the coming years, with public debt reaching nearly 120% of GDP in 2029, and a public deficit exceeding 5% of GDP from next year.
This unfavorable observation made, the CCE report highlights several avenues for restoring public finances while preserving Belgium’s capacity to invest in key sectors. Unions and employers are not wet. Their recommendations lack a bit of the courage that future executives will have to demonstrate to redress the balance on the budgetary level. In fact, they remain rather “generalist”.
The Walloon governments and the Wallonia-Brussels Federation will save money: here are the major measures that have been announced
Prudence de Sioux
First, the Central Economic Council recommends limiting the increase in public spending to economic growth. This may not seem like much, but it would represent a serious drop in net spending of the order of several billion per year. As part of this measure, Belgium must indeed improve its structural primary balance by 0.72% of GDP per year (for an adjustment period of four years) or by 0.5% (for a period of seven years ) – or 3.1 billion euros per year. “An improvement over 7 years in the structural balance of 23 billion euros“, specified Benoit Bayenet, president of the CCE during the press conference. This approach would make it possible to reduce the budget deficit to less than 3% of GDP, and put the debt on a downward trajectory.
Next, the CCE advises questioning the efficiency of spending, particularly in the area of health care and pensions – major budget items. This includes reforming the long-term health care system and reviewing work incentives. No details here, probably because the sensitive subject: employers and unions did not risk being more concrete.
The same observation applies to the third recommendation: increase investments in infrastructure, particularly in transport and the energy transition, in order to stimulate productivity and employment while respecting European standards. Here, too, the CCE does not give details on the sectors that should be targeted, nor what it means by “productive”.
This famous institutional lasagna
Finally, a shift in the tax burden is proposed, aiming to reduce taxation on labor and increase levies on carbon emissions and fossil fuels. An antiphon. This would not only support the ecological transition but also strengthen work incentives. In addition, a review of tax expenditures (notably tax loopholes) is also suggested to create additional budgetary margins. Just as the need for increased coordination between the different levels of power in Belgium is suggested. “The institutional complexity of the country, with a sharing of budgetary powers between the federal government and the federated entities, requires a concerted approach to ensure the viability of public finances.“, explains the CCE in its report. We are far from it…
