Di Rupo submits final budgetary proposals to liberals and Christian Democrats

17th November 2011, Comments 0 comments

Formateur Elio Di Rupo PS yesterday made a “best and final offer” in his effort to reach agreement on the budget. He met the other parties halfway with reduced taxes in an attempt to get the French speaking liberal MR and the Christian Democrat CD&V on his side and isolate the Flemish liberals of Open VLD in the process. His plans were however thwarted as both Open VLD and CD&V expressed dissatisfaction after careful analysis of the new budget proposal. The liberals and Christian Democrats were particularly distressed to find out from the budgetary table that Di Rupo had still not planned to pass any serious structural reforms in the job market and the pension system. His most significant intervention was the scrapping of wealth tax in 2012 and proposals to introduce it in a milder form in 2013, with a target of only 88 million instead of 500 million euros to be raised. He also proposed less cuts to the service voucher system, with a maximum hike of 1 euro in 2013. Additional tax on company cars, which caused considerable criticism during the past week, will also be less severe, with a yield target of 300 million instead of 500 million euros. Similarly the return on the advance levy on savings products will be reduced from 1.1 billion to just under 900 million euros. In an effort to compensate for the loss of tax income, Di Rupo proposed to scrap all new initiatives such as cutting 300 million euros of taxes by an increase of the tax-free income. This would still leave him in need of 600 million euros, which he hopes to generate with a balance of savings, new income and diverse measures.

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