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Van Peteghem sees room for 2.5 billion federal savings

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Finance Minister Vincent Van Peteghem (CD&V) is calling for a federal saving effort of around 2.5 billion euros or 0.5 percent of GDP.

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It has been agreed within the Vivaldi government to make at least a fixed effort of 0.2 percent or one billion a year to bring the budget deficit back under control after an expensive corona year. But there is also room for a ‘variable effort’, in function of the economic recovery, on which the coalition partners must agree.

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Federal Budget Minister Eva De Bleeker (Open VLD) had called for a budget effort of 0.6 percent or 3 billion euros. The liberals think the recovery leaves room for maximum extra effort, but the left parties don’t want to hear about that. They fear that the recovery will be crippled by too much effort and prefer to stick to the fixed effort of 0.2 percent.

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Van Peteghem made it clear this weekend, in interviews with L’Echo and the VRT program ‘De Zevende Dag’, that he thinks an extra 0.3 percent (1.5 billion) remediation is justified, with which he leans more towards the liberal point of view.

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Van Peteghem also emphasizes the need for ‘medium-term reforms’. ‘To anyone who warns that we should not stifle growth through extra savings – especially the PS – I answer that we will also cripple that growth if we don’t implement reforms of the labor market and pensions,’ said the minister.

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Van Peteghem is preparing a number of tax reforms himself, such as abolishing a tax benefit for the second home and the lower social security contributions for top football players. MR chairman Georges-Louis Bouchez does not like the curtailment of the favorable regime for top football because it ‘will kill top football’.

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Van Peteghem answered Bouchez in ‘The Seventh Day’. If Mr Bouchez wants to explain to his cleaning lady why she pays more social security contributions than footballers who make millions, be my guest. But I can’t and won’t explain that, I want to do something about it. The excesses in our tax system have to go anyway.’

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Another discussion within the government revolves around ending the current corona support. The French-speaking government parties want to continue that support until the end of the year. Van Peteghem argues for a gradual ‘phasing out’ from October. In any case, the support for the catering industry in the form of a temporarily lower VAT (6 percent) will disappear on October 1, he said.

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