If it were up to formateur Bart De Wever (Flemish nationalist N-VA), the next federal government will have to find 23 billion euros in extra revenue. The cash is needed to reduce the budget deficit to 3 per cent of GDP by 2030 and pursue new policies that involve a price tag. The money is supposed to be generated by reforms on the labour market, on pensions and social security. The strongest shoulders are expected to contribute more via a solidarity contribution on people earning more than EUR 6,000 on shares.
Formateur De Wever’s super memorandum assumes Belgium will be given 7 years to put its budget back in order by the European Union. Read: reduce the deficit to below the norm of 3 per cent of gross domestic product (GDP).
If Belgium’s budget is not ready on time, the EU can still cut that deadline to 4 years. Either way, getting the budget deficit below the 3 per cent mark by 2030 will require the government finding some €18 billion.
To this must be added some €4.6 billion for extra expenditure on new policies. Additional money will be spent on the police, the justice department and on returning migrants(€400 million in total by 2029) and defence (€1 billion). Belgium needs to reach the NATO defence spending norm of 2.5 per cent of GDP by 2034.
Tax reforms are also planned. This will cost some €3.5 billion by 2029 but should also generate additional revenue in the long run due to higher purchasing power and more growth.
The tax allowance on income tax will be increased, which should give people more in their pocket.
Measures to increase business competitiveness (including by lowering wage costs) will be introduced.
Who will pay for all this? VRT News looked at the figures in the Super Memorandum and identifies the most striking measures.
Above all, work should pay more
Net wages should rise from 2027, mainly by increasing the tax allowance on your income tax. The aim is to increase the difference between working and not working to 500 euros per month.
Tax relief on unemployment benefits will be abolished.
Doubling of tax allowance on income from student work to discourage students from ceasing to be dependents. Students will be allowed to work up to 600 hours a year.
Tax will be due on the trade union membership grant for employees.
Unemployment allowance will be limited in time to a maximum of 2 years. The amount of unemployment benefit will also fall more quickly. This does not apply to those over 55 who have worked for more than 30 years.
Drastic pension reform
A ‘pension malus’ system is being introduced: you will get a lower pension if you retire earlier than your legal retirement age. The amount will be 2 per cent less per year until 2030, 4 per cent less between 2030 and 2040 and 5 per cent less from 2040 onwards.
Anyone working longer than the legal retirement age will get a pension bonus. However, you have to have worked for more than 35 years and the percentages are similar to those of the pension malus.
From 2027, so-called assimilated periods (periods of absence that count as periods worked) will no longer count towards your career if they represent more than 50 per cent of that career. That limit falls by 5 percentage points a year to 20 per cent in 2033. The measure will not apply to periods of sickness and care leave.
Early retirement will be possible after a career of at least 42 years. Now it is 44 years.
The retirement age for military personnel (56 years) and Belgian Rail personnel (55 years) will be raised gradually to the statutory retirement age from 2027. From 2027, 1 year per year will be added each year, and measures to keep the system workable will be provided.
Civil servants will no longer be able to save up their sick days. Instead they will get disability insurance like in the private sector.
Pension calculations for civil servants' pensions will gradually be aligned with those for employees and the self-employed. Once equality is achieved, a second pension pillar for civil servants will be made possible.
Automatic retirement for civil servants will be abolished when they reach the statutory retirement age.
Tax relief on high pensions will be phased out.
The solidarity contribution on supplementary pensions will rise from 2 to 4 per cent for amounts above 100,000 euros.
“The broadest shoulders to contribute more”
Instead of a 10 per cent capital gains tax, there will be a 5 per cent solidarity contribution on capital gains from equity. However, this will apply to more investors: people earning more than €6,000 a year from shares.
The securities tax on people with investments worth a million euros or more will rise from 0.15 per cent to 0.25 per cent.
These are the plans but have not yet been agreed.