'Formateur' Di Rupo's note: the N-VA's assessment

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1. 'Formateur' Di Rupo's note: the N-VA's assessment. INTRODUCTION. As you know, we have been very thoroughly studying EDR's note over the past few ...

Sujets

• Nieuw-Vlaamse Alliantie
• Belgique
• Partis politiques belges
• Politique de la Belgique
• Flandres
• Autonomisme
• Régionalisme
• Séparatisme

Informations

• Publié par: Voxpopuli
• Nombre de lectures: 49
• Langue: English

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‘Formateur’DiRupo’snote:theN‐VA’sassessment INTRODUCTION Asyouknow,wehavebeenverythoroughlystudyingEDR’snoteoverthepastfewdays.Agreatdeal ofworkwasclearlyputintothisnote,andthiscommandsrespect.Ourstudydepartmentandour technicalcolleagueshaveanalysedallofthe‘formateur’s’proposalsingreatdetailand‐tothe extentpossible‐putfiguresontheirimpact.Iamgoingtoexplainourconclusionstoyoutoday. WhenIheardandreadthefirstcoverageaboutthenote,IhavetosaythatIwashopeful.Ofcourse,I realisedthatthetruthwasprobablynotasrosyassomepeoplehadledtobelieveandthatthere mightbehiddenmeaningsinthenote,butIstillbelievedthatwewouldatleastbeabletogofora ‘yes,but’.I’dhopedso,anyway. But,alas.Afterreadingthenoteindetailandlookingatthetechnicalanalysescarriedoutbymy colleagues,itbecamecleartomethat,fortheN‐VA,thisnoteisreallynotagoodbasisforfurther negotiations.Asthe‘formateur’rightlyremarkedafewdaysago:whoeversays‘yes’tothisnote mustgenuinelybelievethatnegotiationscansucceed.Imustadmit:withthebestwillintheworld,I reallydon’tbelievethatnegotiationsbasedonthisnotecouldleadtoasuccessfuloutcome. Iwillsoonexplaintoyouourobjectionsindetail,butIshallstartbybrieflyoutliningthemforyou. 1. Regardingthebudget The‘formateur’s’budgetaryoperationisinfactamassivetaxincrease.Itaffectsanyonewho workshard,anyonewhoisenterprisingandanyonewhohassavings.Withthisnote,weare giventhedoubtfulhonourinEuropeofbeingthecountrythatreducesexpensestheleast andlooksmostforresourcesinextrarevenue,whilewearestillthecurrentchampionsin termsofgovernmenttaxes,andthetaxburdeninBelgiumisalreadyskyhigh. 2. Insocial‐economicterms AlmostallrecommendationsmadebytheEuropeanCommission(aswellastheIMFandthe OECD)havebeendisregarded.Theseconcernedthevitalreformsneededwithregardto socialsecurityandthelabourmarket.The‘formateur’s’noteconsiderablyraised expectationsinthisregard,butonfurtherreading,itdoesnothingtomeetthese expectations.Themeasuresconcerningunemployment,pensionsandhealthcarehavelittle orevennoimpactwhatsoever. 3. FinancingLawandfiscalautonomy ThenewFinancingLawoffersverylittlerealautonomyandbarelyhasaneffectonraising accountability.Infact,existingpersonalincometaxcontributionsmadetothefederated entitieshavesimplybeenconvertedintoadditionalpercentagetaxes.Itisnotpossibleto alsoreallyexecuteone’sowntaxpolicyexceptforlinearlyincreasingordecreasingpersonal incometax.Furthermore,asolidaritymechanismthatwipesoutalldifferencesremains.For theCommunities,thestatefunds,basedonneed,willsimplyremainastheyare,exceptfor

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thefactthatFlanderswillbe600millionshortbecauseofthestoptothe‘Lambermont turbo’. 4. Statereform Intermsofthestatereform,thenotedoesnotcontainmuchnews.Itisperceptiblyunder theleveloftheVandeLanottenote.Billionswillindeedbemovedaround,buttherewillnot bemanyrealpolicylevers.Furthermore,itisnotanexerciseinhomogenisation,butrather annthpiecemealreformthatwillnotimproveadministrativeefficiency. 5. Brussels&BHV TheproposalsconcerningBrusselsaredisastrousforFlemings.Thelegalbilingualismofthe capitalisprettymuchdoneawaywith,andthepoliticalguaranteesforFlemingswithregard toRegionalgovernmentarebeingeroded.Inspiteofthis,Brusselsgetsanextra600milliona year.Ontheotherhand,thereisnotasinglecommitmenttomaketheBrussels administrationmoreefficient.Weare,however,supposedtoacceptthatBrusselsisgiven morecompetencesandbecomesafederatedentityinitsownright.Inthesix‘facility communes’intheVlaamseRand(FlemishPeriphery),thefacilitieshavebeendefacto reinforced. CENTRALSECTION 1) Regardingthebudget

RepartitionoffinancialreorganisationaccordingtoEDR’snote

4.6billioneuros,or20%ofthereorganisationefforts,willbetransferredtotheRegions andCommunities,andontopofthat,theyhavetofootthebillagainforthepensionsof theiremployees(withoutbeingallowedtohaveanysayintheirretirementage)andfor commutersinBrussels.ThiswouldmeanthatFlanderswouldhavetosaveintotalat leastanextra2.5to3billioneuros,i.e.10%ormoreofthetotalcurrentFlemishbudget, althoughFlandersalreadysaved8%ofitsbudgetoverthepasttwoyears.Thismeans thatFlandersisbeingpunishedforitspreviousfinancialreorganisation.Becausethose whohadnotyetdoneanythingarenowrequiredtoreorganisetheirfinances(anditis 2

reallydoubtfulwhethertheywillactuallydoso),whileFlanderswouldhavetostartona secondreorganisation.Inotherwords,shouldthegoodpupilbepunishedforhis exemplarybehaviour? Atfederallevel,EDR’snotefocusesasamatterofpriorityontaxincreases.Thenote mentions37%ofsavingsonspending,butinfactitisevenlessthan30%,i.e.6.8billion eurosfromatotalof22billioneuros.Gettingridoftaxrebates,forinstance,doesnot constituteasavingonspending,butratherhigherrevenuefromtaxation.Furthermore, EDRisoverestimatingthesavingsheisimposingintermsofhealthcarebecauseheis artificiallycomparingthenewgrowthstandardof2%withtheformer4.5%growth standard,whereastheactualgrowthamountsto3.1%.Thismeansthattheeffective savingamountsnotto3,but2,billioneuros.Apartfromthisnewgrowthstandard,no savingsaremadeatallwithregardtosocialsecurityasawhole.AlmostallofEDR’sthird category,theso‐called‘miscellaneous’measures,alsoseem,oncloserexamination,to beextrarevenue.

ThistsunamioftaxincreasesisincompletecontradictionwithwhatEuropeis recommendingtous.Inviewofthetaxburden,whichisalreadyveryheavyinour country,theInternationalMonetaryFund,theOECDandratingagenciesarealso recommendingthatBelgiumcarryoutareorganisationonthespendingside.EDR’snote doestheexactopposite.IfwelookatthesavingsoftheFederalGovernment,thenitcan beseenthatnootherEuropeancountryraisesasmuchmoneyontherevenuesideas Belgium,andwehavealmostthehighesttaxburdeninEurope!Wearetheonly Europeancountryinwhichmoreworkisdoneontherevenuethanonspending.Inour opinion,thisistotallyirresponsible.

Europeancomparisonfinancialreorganisationefforts2014/2015revenue‐spending Theproposedmeasuresweighheavilyonentrepreneurship(approx.4.6billioneurosof taxincreases=43%oftherevenuefromcorporatetaxation),fornewcompanies,SMEs andlargecompanies.Theyarecausingirreparabledamagetotheinvestmentclimate, 3

andtheencroachmentonthe‘notionaltaxrebates’isaformofbreachofcontract. Furthermore,theadministrativeburdenisnotgoingtogetlighter,ratheritisgoingto becomemuchheavier. Thenotewillalsodirectlyaffectfamilies,withataxincreaseof4.3billioneuros(=10%of therevenuefrompersonalincometax).Themiddleclassandpeoplewhoworkwillbe themostaffected.Theywillbesqueezedevenharderthanisalreadythecasetoday.For anaveragefamily,thisworksoutatataxincreaseof1,000eurosperyear!Foryoung people,thismeansthat,overtheirentirefuturecareer,theywillreceiveayear’ssalary lessandhavetohandthismoneyovertothegovernment.

Morehighlypricedservicecheques+scrappedtaxbenefit Harmonisationofwithholdingtaxonincomesat20% Introductionofataxonsurplusvalue,wherebysmallprivate investorswillbeaffected Stricterrulesregardingbenefitsofacompanycar Reduceddeductionofgroupinsuranceandfineincaseofearly claim Taxrebateonlowincomes Other(fraud,largefortunes,etc.) TOTALBURDENONWORKINGPOPULATION

2) Insocial‐economicterms

240millioneuros 1,160millioneuros 1,000millioneuros

1,200millioneuros 150millioneuros

‐500millioneuros 1,090millioneuros 4,340millioneuros

Social‐economicreformswereannouncedwithmuchado,butinfact,EDR’snoteonlycontains veryminorchangestoexistingunemploymentandpensionschemes.Ifwecomparethiswith Europeanrecommendations,thenitappearsthatonlytwoofthesixrecommendationsare observed.Thismeansthatthe‘formateur’istakingaveryscepticalstanceagainstEurope;and thatBelgiumisisolatingitselfmoreandmorefromtheEuropeanmainstream. UNEMPLOYMENT Thedegressionofunemploymentbenefitsismentioned,butinfact,thebenefitswill firstincreasetoonlysubsequentlydecreaseverygradually.Itisnotcleariftherewill evercomeapointwhenthebenefitwillbelowerthanisthecasetodayand,ifso,how longitwilltakebeforethatpointisreached.Thiscostpriceoftheschemetherefore threatenstoincreaseratherthandecrease. Thebenefitswillalsonotbelimitedintime.Theyarelimitedintimeeverywherein Europe,mostgenerallyfromsixmonthstotwoyears.Intheaftermathofthefinancial‐ economiccrisis,anumberofcountrieslimitedthisperiodevenfurther.Itwasreducedin Denmark,forinstance,fromfourtotwoyears(eventhoughitisacountrywithastrong socialsystem).SoBelgiumisnowtheonlycountryintheworldinwhichyoucanreceive unemploymentbenefitsforever. 4

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Theinterimallowances[forschool/highereducationleavers]arenotdoneawaywith.It willthereforeremainpossibleinthiscountrytoreceiveunemploymentbenefits throughoutaperson’sentirelifetimewithouteverhavingworkedforasingleday. Inotherwords,thisnotedoesnotincludethenecessarystimulitoencourage unemployedpeopletolookforasuitablejob. Thebudgetaryeffectsofthetentativereformsregardingthelabourmarketarealsovery limited.NootherEuropeancountryiscurrentlyspendingmoreonlabourmarketpolicy (includingbenefits)thanBelgium.NotevenSpain,eventhoughunemploymentthereis over20%.The‘formateur’s’proposalswillnotmakeanydifferenceinthisrespect.

Unemploymentrate(vertically)andspendingonlabourmarketpolicyinEU/OECDcountriesas% ofGDP(horizontally)

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WORKINGFORLONGER Earlyretirementisbarelytouchedupon.Evenincasesofrestructuring,itisstillpossible topensionpeopleaged55offearlyandshiftthecostsontosociety. Theagetoqualifyforearlyretirementwillalsoonlyberaisedextremelygradually.The minimumagewillbeincreasedbytwomonthseachyear.Atthisrate,theeffective retirementageattheendofthisparliamentarytermwillrisefrom60to61years,andit willtakeus30yearstoreach65…. ItisproposedinEDR’snotetoincreaseasof2013theageatwhichjobseekersmustbe availableforworkfrom50to55,andasof2016(i.e.inthenextparliamentaryterm)to age58.InFlanders,however,theVDAB(Flemishpublicemploymentandprofessional trainingservice)willalreadyactivelyhelpjobseekers,uptotheageof58,findwork. BETTERCLIMATEFORENTERPRISES Theapproachto‘notionaltaxrebates’isextraordinarilytough.However,Iremember that,whenPrimeMinisterLetermewasvisitingvariousAmericaninvestors,loudand clearrequestsweremadethatthe‘notionaltaxrebates’beleftuntouchedandthata stabletaxclimatebecreatedinourcountry.Ifthisreformofthe‘notionaltaxrebates’is implemented,wewillsufferahugelossoffaceintermsofcredibilitywithregardto foreigninvestors. AnumberofpositivemeasuresaretakenforSMEs,buttheyareoffsetbymanytax increasesandextraadministrativeburdens:theerosionofthe‘notionaltaxrebates’and indexationaremaintainedandnotreformedasEuropeisrequesting,employer contributionsforearlyretirementareincreasing,increasedtaxonincomederivedfrom securities,taxonsurplusvalue,etc.Thesearealltaxincreasesthathaveanegative effectonemployment.The‘formateur’wantstocreate250,000jobs,butitwilldefinitely nothappenthisway. Moreover,thenotealsoincludesawholelistoftroublesomemeasures: I hegovernmenttodecidethatlistedcompaniesmayonlymake30%ofosituptot thesalary variable? Isituptothegovernmenttodecidethatlistedcompaniesmustreducethegapo betweenthehighestandthelowestsalaries? Isituptothegovernmenttodeterminethatcompaniesmustselectpeoplefromo allagecategoriesincasesofcollectiveredundancies? Manydifficultdecisionsarebeingshiftedtothesocialpartners(andsincethe ‘generationpact’,weknowthatmaybenothingwillchange). Assessmentofearlyretiremento Definitionofgeneralsecondpillarandconsolidationoffirstpillaro Employmentplanforolderworkerso Introductionofamechanismwherebytherecruitmentstimuli,whichremainato federallevel,canbelinkedtotheeffectivecreationormaintainingofjobs Improvementofthequalityofemploymentinthetempingsectoro 6