The paradigm shift of the Michel government

5 December 2016
The paradigm shift of the Michel government

The present government’s budget work is being roundly criticised, the N-VA observes. But what are not being adequately clarified are the movements between income, expenditure and debts that have taken place in Belgium over the last eight years. To get a better perception of this, we decided to examine the following parameters ourselves for that period (2009-2016): the income or costs, the expenditure, the budget deficit, the national debt, the trade balance and the evolution of unemployment.

Under Di Rupo (2011-2014), taxes were systematically raised, our analysis shows. Every year there were an additional eight billion in taxes, which in practice meant an average Flemish family had to cough up an additional 3,000 euros every year. In comparison with 2010 this meant that the tax burden increased by no less than 2.7% of GDP The gross domestic product (GDP) is the total monetary value of all goods and services produced within a country, both by companies and the government. This term is usually used as a benchmark for a country’s prosperity. This is why the N-VA closely follows the evolution of the Belgian GDP. GDP . However, in the same period, expenditure did not go down, thus preventing the national debt from being reduced. The billions of additional taxes that were imposed have not in any way contributed to reforms, savings or macro-economic strength. On the contrary, the money floodgates were opened wide. The evolution of the trade balance shows that the country was overloaded and could no longer be competitive.

Tax tsunami reversed

The tide turned definitively in 2015, thanks among other things to the Tax shift There is a tax shift when a new tax is implemented or an existing tax is increased in order to reduce or get rid of another tax. The N-VA is a proponent of a shift of the burden on labour to that on consumption or environmental pollution, for example, but not of a tax that increases the total burden of taxation. tax shift . The tax shift is giving money back to working people and companies, costs are down, and in macro-economic terms this is having a direct effect: unemployment is once again on the decline and the trade balance is highly positive again. This government has again reduced the tax burden by 1.2% of GDP. As a result, in just two years, half of Di Rupo’s tax tsunami has already been reversed. As for expenditure, it is once again under control, with savings of 1.2% of GDP already having been made. And next year the government will help out further, so that Di Rupo’s expenditure explosion can finally be fully undone. With a delay of seven years, we can then start to tackle the budgetary consequences of the banking crisis ourselves.

The only thing notable in the budget is that we are ending 2016 with higher expenditure than planned. Income, however, is indeed at the forecast level. We can in no way tolerate this higher expenditure, and it is an aspect on which this government is keeping a very close eye. For 2017, over 2 billion in savings have already been registered in the budget. And it would be wise for us all to work on a robust package of savings by the time the budgetary control comes round in spring, savings which if needed can be carried out quickly.

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