Federal government convenes over budget plan for upcoming year

Federal ministers will start discussions on Friday evening to finalise next year's budget. The negotiations must be completed by Tuesday when the prime minister will make his policy statement in parliament.

To keep the budget on track and in agreement with the European Commission, the coalition must reduce the budget deficit by 0.2 per cent of GDP. The government had previously agreed to look for 1.2 billion euros to achieve this. The officials of the monitoring committee have said that 800 million euros would be sufficient. While prime minister Alexander De Croo and Budget minister Alexia Bertrand (Open VLD, liberals) are pushing for the higher sum, socialist party PS would prefer to stay within the vicinity of 800 million euros.

Items on the agenda

In addition to neutralising the deficit, the government will still need to find money to cover asylum seekers and support for Ukrainian refugees. Bertrand confirmed this week that the corporate tax proceeds from the frozen Russian assets at securities house Euroclear will go to costs associated with Ukraine. Last year, 834 million euros of income was registered.

Minister of the Interior Annelies Verlinden (CD&V, Christian democrats) has asked for additional resources for the police, including investing in digital systems that would aid local police with administration tasks. She is also advocating for further investments in digital investigations and for the federal judicial police throughout Belgium.

Regarding sourcing funds, the coalition has agreed on the rule of one-third: one-third from taxes, one-third from expenditure and one-third from "miscellaneous'" The left-wing parties have already put forward various proposals to close the gap. Vooruit argued for an excess profit tax for banks, but Finance minister Vincent Van Peteghem (CD&V) is not in favour. He would rather see banks' profits flow directly back to savers than the government treasury.

Potential tax increase

PS and Flemish greens Groen want to add 0.15 per cent of taxes onto securities accounts with a value of more than 1 million euros, creating a revenue of approximately 400 million euros. Francophone socialists PS suggested tripling or quadrupling that rate. Van Peteghem is not opposed to an intervention in the securities tax but would rather see it done in a progressive manner. Groen also wants to increase the flight tax, pointing out that it is higher in neighbouring countries.

The negotiations will begin on Friday at 19.00 and continue throughout the weekend. It is unclear whether the government will require more time on Monday. De Croo is expected in Parliament on Tuesday afternoon for his State of the Union address, in which he will explain plans for the final year of the legislature.


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