Flemish PM Diependaele dishes up 'a balanced budget'

Diependaele stressed that difficult choices had been made by the three coalition partners that share a common but also at times diverging vision.

The budgetary operation is the toughest budgetary exercise ever for a Flemish Government. Diependaele provided figures in his September Statement to the Flemish parliament. “In concrete terms, this round of cuts will amount to nearly 2 billion euros in 2027 and ultimately to 3 billion euros in 2029.”

“3 billion euros, of which 1.2 billion is made in the public administration and in subsidies: that is unprecedented for a Flemish government.”

The Flemish PM emphasised that the budget is also a balanced one. “That provides long-term certainty. Sound public finances are a necessary condition for a thriving Flanders.”

What's the substance?

The PM noted there will be no cuts in education: “Education is the cornerstone of our future prosperity,” was his message.

The Flemish government should no longer outsource tasks it can carry out itself. Staff regulations in the Flemish civil service are being modernised.

Additional savings are also being made in the ministerial departments. In total, this amounts to more than 1 million euros annually.

But the Flemish government is maintaining its level of investment.

“We are also investing in extra care and additional capacity,” Diependaele emphasises. “Youth support, care for the elderly, support for people with disabilities and mental health care will also be further strengthened.”

A balanced budget

The agreement provides for a balanced budget until 2029.

To achieve this balance, 3 billion euros must be cut from the budget over the coming years. To realise this, reforms and savings totalling 3 billion euros have been finalised.

In total, more than 1.2 billion euros will be saved on public expenditure: this includes subsidies (500 million euros) and savings within the civil service (over 700 million euros).

Reforms

The price of service vouchers, the ‘dienstencheques’, will rise from 10 to 12 euros. Anyone purchasing more than 175 service vouchers per year will pay 13 euros per voucher from the 176th voucher onwards.

Registration fees, a tax on property purchases, will be increased from 2 to 3 per cent. This applies to all properties, not just those costing more than 500,000 euros (as was initially planned).

The Growth Allowance, which combines the former child allowance and other financial family support, will continue to be paid up to the age of 23 (currently up to 25) for students still living at home. The exception whereby parents of children who are not continuing their studies are entitled to the Growth Allowance until the child reaches the age of 19 is being abolished.

The birth grant of 1,310.75 euros that parents receive on the birth of their children would only be paid on the birth of their first child.

Some of the reductions in inheritance tax are being postponed until 2029. Inheritance tax on small and medium-sized estates will, however, be reduced: by 160 million euros by the end of the legislative term. The exact details of this reduction will be discussed over the coming years.

Savings

More than 500 million euros in subsidies are set to be cut. Each minister will have to make cuts within their respective areas of responsibility. With regard to cultural subsidies, savings will include cuts in museums and archives.

More than 700 million euros will be saved within the civil service. Around 180 million euros will come from savings on civil service staff, partly by making changes to civil service regulations.

Flemish civil servants will lose two paid public holidays: 2 November (All Souls’ Day) and 15 November (King’s Day). These are paid public holidays in the civil service that are rarely, if ever, observed in other sectors.

Savings are also being made at local authority level. The figure is expected to reach 240 million euros by 2029, mainly through lower indexation of funds from the Municipal Fund.

Transport operator De Lijn will receive less money than previously promised: the promised 50 million euros will be halved to an additional 25 million euros.

Cuts are also planned on support for SMEs, including the subsidies that companies receive to train staff within their organisations.