1 billion euro in expenditure excluded from Brussels regional government “balanced budget” plans

In the coalition agreement that was concluded at the end of last week the 7 parties that make up the new regional government agree to provide 1 billion euro for “strategic investments and stakeholdings”.

It has now become clear what is meant by this. 400 million euro will be invested in the Brussels Housing Company (BHM) and 180 million euro in the ailing Brussels water company Vivaqua. 

However, this expenditure will not be included in the figures that will be used to judge whether or not the regional budget has been balanced by 2029. In an interview with the Francophone daily ‘Le Soir’, the Francophone socialist minister in the new regional government Ahmed Laaouej said that “This new approach will, once it has been approved by the European authorities, lighten the load on the budget”.

“This concerns one-off credits or participations and not structural expenditure. As result they can be excluded from the annual budgetary targets, Professor Willem Sas (UHasselt/KU Leuven) told VRT News. “The money will be spent though and so will be included in the Brussels-Capital Region’s total debt”. 

The Brussels section of the Flemish employers’ federation VOKA is critical of the move to exclude some expenditure from the regional budget.

VOKA Brussels’ Director René Konings told VRT News that “I don’t believe that this is an orthodox way of going about things. In the long term this is a problem for people that pay tax in Brussels. We call on the Brussels Region be more reticent when it comes to using creative accountancy tricks”. 

Last week, the leader of the Francophone liberal party Georges-Louis Bouchez, who had led the coalition talks, announced reductions in the level of property tax, stamp duty and personal imcome tax for those living in the Brussels-Capital Regional. All of these will be implemented by 2029. The regional “tax shift” will cost 100 million euro/annum.

Elsewhere, the Brussels regional government plans investments. Professor Sas says that it is a good thing that investments will be made in (for example) infrastructure. 

It remains for the most part unclear how the Brussels regional government will achieve its stated aim of making structural savings of 1.2 billion euro in the regional budget by 2029.

Professor Sas told VRT News that "I note that there are a lot of assumptions behind the tables that raise questions. The region's personnel costs account for a large part of the expenditure in Brussels. They don't intend to replace people that are retire, but they say that there will be no redundancies."

“By 2029, this recruitment freeze should generate 125 million euro. They also hope to find 37 million euro by reducing absenteeism. But have these figures been substantiated? Or have they just set a target and to only then work out a plan?”. 

Professor Sas went on to say that “There are many things that sound good and are also necessary. For example, the budget tables talk about 'optimisation of human resources throughout the regional administration'. Saving: 30 million. Or a general cuts to administrations’ operating resources. Another 50 million. This amounts to 80 million euro in total. But is there a plan to ensure that this is achieved?"

“In the main those that invest in Brussels and the financial institutions want reform. They are less concerned about the current obsession with the budget deficit as long as things are moving in the right direction.”

The regional Budget and Finance Minister Dirk De Smedt (Flemish liberal, photo above article intends to present the budget for the rest of 2026 to the regional parliament within the next two weeks.