Government policy statement
Mr President,
Dear colleagues,
We want a better future. With more security and greater prosperity.
We have worked very hard for the past two years to modernise our country and to better prepare it for the challenges facing us today.
The tax shift - 8 billion euros, the reduction in employers’ contributions from 33 to 25%, the increased support for SMEs, the reform of the pension and healthcare systems…
These are only a few of the decisions we have already made and that are producing results.
Exports are increasing. So are investments. Tax and tax-related pressure is dropping. Employment figures are rising.
These are good results, but they simply are not enough.
The announcement made by Caterpillar and ING comprises a brutal reminder of our responsibility. Our duty to fight for every employee, for every job, for every family.
We aim to continue the complex task of restructuring.
If the deficit is not eliminated, our debt will only increase.
Every euro used to pay back the debt is a euro lost to purchasing power, to the government services or towards solidarity.
Greater efficiency to create jobs. And greater fairness in terms of taxation. These two objectives go hand in hand.
Even more so, they must strengthen one another. Because those who are most disadvantaged are always the first to pay the price when employment falters.
The macro-economic forecast at global level for 2017 is moderate. Global economic activity should, however, gradually start to pick up once again.
This year our economy grew more than expected, and this growth should attain 1.4% of GDP for 2016
The Federal Planning Bureau has adjusted its forecast for 2017 to 1.2%, while the IMF anticipates 1.4% growth.
The National Bank of Belgium expects 140,000 new jobs to be created by 2018.
Dear colleagues,
We must expect negative impacts following the Brexit vote, and our country is particularly affected.
Our economy is very open to Europe and the world.
In 2016, Belgian exports have been boosted by falling charges on labour.
For the first time in 10 years, our balance of trade is starting to move out of the red. Exports have risen by 5.4% in 2016, compared to 3.2% for imports (Source: National Bank of Belgium).
However, the pace of exports could be hindered in 2017 due to the economic slowdown in Europe.
We must therefore redouble our efforts in our strategy to continue to attract investors.
Without taking into account the exceptional operations of previous years, the growth of the volume of corporate investment has increased by 6.2% this year.
This can in part be explained by relatively low interest rates, but also by increased business confidence.
Mr President,
Dear colleagues,
Almost two years ago we launched our programme for a stronger future.
This programme was born out of necessity.
Taking popular measures is easy.
Certainly if you avoid paying the bill by passing it on.
However, this is not a choice we wish to make.
For the first time in 10 years, our balance of trade is positive.
The confidence of our business community has grown.
According to the OECD, Belgium is among the countries that implemented the greatest tax reforms in 2015.
The foundation has therefore been laid!
We will keep to the course we have set:
Our budget in order,
structural reforms
and a pact for strategic investments.
- A well-planned budget to support the real economy
On Friday, the Government finalised the 2016-2017 budget and approved numerous reforms.
We have met our European commitments. The Government will pursue the target for improvement in the structural balance set at 1.2% of GDP for the 2016-2017 period.
And we are choosing to keep a return to balance in 2018 a possibility.
This commitment requires a budgetary effort of 3 billion. And we are being cautious. A buffer of 739 million euros (or 0.17% of GDP) has been decided upon.
It is primarily aimed at addressing trends in tax revenues.
We began by carrying out meticulous monitoring of our decisions. Line by line and with nothing off limits.
We were as such able to identify 1.2 billion euros corresponding to the full execution of measures decided on beforehand. And we are taking new measures amounting to 1.8 billion euros.
Dear colleagues,
We have made important and consistent choices:
- No consumption tax: neither VAT nor excise duties;
- No taxes imposed on workers:
- No restrictions on unemployment benefits;
- No changes to the indexation mechanism.
We will thus continue our support for purchasing power and the reduction of charges on labour. The tax shift is confirmed.
By 2019, there will be 140 euros net more per month for people with low incomes!
This is a decision that makes a difference in the daily life of a very large number of families.
Dear colleagues,
100% of new tax revenues come from income on capital or environmental taxation, i.e. 600 million euros:
- From 1 January 2017, withholding tax will rise from 27 to 30% (385 million).
- The tax on stock exchange transactions will be expanded and the ceiling will be doubled (76 million).
- Internal capital gains will be taxed (31 million)
- The reform of taxation on fuel cards (for employers) will be coupled with freedom of choice for mobility (100 million).
Dear colleagues,
Two years ago, in this forum, we promised not to increase tax pressure. We are doing better than expected.
Overall tax and tax-related pressure has decreased by 1.2 billion (37.1% to 36.6%) since 2014.
And better still, tax and tax-related pressure on labour has decreased… by 3.4 billion (26.3% in 2014 to 25.5%).
The structural reform process
Dear colleagues,
Over two years, we have initiated the process of structural reforms.
We have submitted over two hundred draft laws to Parliament in order to fundamentally reform our country.
The world is changing with a speed never seen before. We must therefore adapt our economic and social model.
Creating and growing businesses, inventing new solutions, innovating and ensuring strong solidarity.
We have strengths and we are making progress.
- Audi is investing 600 million euros in Brussels.
- In Louvain-la-Neuve, IBA is recruiting 400 people to press on with its industrial development.
- And Pfizer has just opened its new European logistics centre in Zaventem.
- AGORIA has announced the creation of 3,000 new jobs in 2016 and is planning 10,000 more by 2020.
- And there are many other examples.
The unemployment rate is at its lowest for a quarter of a century.
Nevertheless, despite 70,000 additional jobs, the employment rate is stagnating.
It is not rising sufficiently because large numbers of young people are entering the employment market.
It is for this reason that we are relaunching starter jobs: in order to encourage the employment of young people.
Dear colleagues,
On behalf of the Government, I am announcing today that we are initiating or expanding 7 strategic reforms to stimulate employment and strengthen social cohesion.
- The modernisation of the employment market
- The reform of the 1996 law on competitiveness and wage formation
- The e-commerce law and the digital agenda
- The establishment of freedom of choice for mobility
- The reform of pensions
- The reform of health care and of the unavailability / invalidity schemes
- Corporation tax/encouragement of investment/tax on shares, including capital gains
I would like to present them to you.
- Labour market reform
The modernisation of the labour market should enable people to achieve a better work/life balance. It also provides an excellent opportunity to make better use of new technologies.
The social partners remain an important point of contact with regard to achieving this reform.
However, the objective is clear: new labour systems must result in greater freedom - for employers as well as employees!
Annualisation of working hours
The 38 hour workweek continues to exist, but as from now it will be calculated on an annual basis.
Therefore, anyone stating that everyone will suddenly have to start adopting a 45-hour workweek is distorting things… to say it diplomatically.
The practice of annualisation will need to be ‘activated’ at entrepreneurial or sectoral level.
100 voluntary and paid hours of overtime
Employees will be given the choice to take a package of 100 voluntary hours of overtime, at maximum, at their own discretion. These hours will be paid out immediately, including a surcharge for overtime work.
Training
In-company training provides a great deal of added value. This is why we wish to strengthen the framework for encouraging in-company training.
Occasional telework / sliding working hours
Employees are currently obliged to take leave when unexpected situations arise, such as a visit to the doctor or an appointment at school.
However, by enabling them to occasionally telework, we are once again giving employees greater freedom.
Sliding working hours also fit within this concept.
This will enable employees to independently decide when to start and end their work days.
Simplified part-time employment arrangements
We also aim to ensure that the labour system will become less rigid.
The obligation to include all timetables in employment regulations, one at a time, is being abolished.
This comprises a key administrative simplification.
Furthermore, part-time employees will be able to request changes in their timetables without this giving rise to overtime wages.
Another change is that we will also enable employees to save up leave days. If they change jobs, they can demand payment in cash to compensate for unused leave days.
Saved-up time will thus no longer be lost.
This is a well-balanced agreement to the benefit of the business world and to employees, and it will create more jobs.
2.2 The Law of 1996
In the past two years, we have succeeded in eliminating the wage handicap.
However, we now also have to ensure that the cost of labour does not rise again in comparison to our neighbouring countries.
To facilitate this, the Law of 1996 is being amended.
The indexing and the application of the wage scales with regard to wage increases will remain guaranteed, as is the situation today.
However, the law will be modified based on the biennial determination of the wage norm by the social partners or the government.
The historic wage handicap, determined by the Central Economic Council, will also be taken into consideration.
- Digital Agenda - e-commerce
The third reform concerns the Digital Agenda and e-commerce.
We can create tens of thousands of new jobs in the digital sector.
However, this will only be possible if we are willing to adapt quickly.
Our country aims to be a pioneer in this field.
We are the first European country to attach the same value to electronic documents as to paper documents.
We have created a tax shelter for young entrepreneurs.
However, e-commerce will not allow us to wait.
We aim to adjust the statutory framework for night shifts.
Online trade is booming. Therefore, there is no better time than the present.
We aim to arm our e-commerce companies with the same competitive assets as our neighbouring countries.
- Company cars
The energy transition and COP 21 are leading us to adjust our mobility policy.
In this context, we are reforming taxation on fuel cards (concerning employers).
And we wish to introduce freedom of choice for workers: a company car, another mode of travel or net wages.
It is not therefore about penalising the use of cars but enabling an incentive for other modes of travel.
- Pensions
The reforms to our pension system are enabling an overall saving of 1.5 billion euros by 2020. We are thus ensuring the payment of pensions to future generations.
Because they essentially aim to extend careers, the measures taken safeguard the purchasing power of pensioners. We are even going to increase this purchasing power by on the one hand raising the lowest pensions and on the other hand by reducing the solidarity contribution levied on pensions by 85 million euros.
By enabling all salaried workers to voluntarily build up an additional pension, we are also going to expand the use of second pillar pensions.
Finally, the government will establish budgetary envelopes that will enable the arduousness of certain professions to be taken into account in the determination of pension rights.
- Health / Invalidity
Health is a precious asset. Our health system is among the best in the world and we want to ensure access to quality health care for all.
In this spirit, we validated the pharma pact and we are continuing the reform of hospital financing in consultation with the sector.
The number of people suffering long-term illness grew by 64% in 10 years and peaked, at the end of 2015, at 370,400 people who had been off work for over a year.
Reform will therefore take place to encourage personal accountability and promote reintegration into the workforce.
Dear colleagues,
- Corporation tax / support for investments and taxes on shares, including capital gains
A crucial challenge is linking economic efficiency and fairness in terms of taxation.
We are currently engaged in the investigation of proposals submitted by the Minister of Finance on the reform of corporation tax.
Our aim is to enhance the attractiveness of our country, to better support SMEs and to create jobs.
We aim to strengthen legal certainty, legislative stability and fair taxation.
We will also investigate proposals to reconcile economic efficiency with fair taxation.
Within this framework, we will be examining opportunities to implement measures that will encourage investment, particularly in the medium term (SMEs + digital agenda + starters).
We will also investigate proposals with regard to the taxation of shares, including capital gains.
Based on analyses and simulations, it will be possible to submit proposals addressing these topics to the government.
Social dumping
Dear colleagues,
Each person must contribute to the financing of solidarity. Along with the sectors affected, we are taking action against social dumping.
We do not accept unfair competition or a regression in labour standards.
We have adjusted the public procurement rules. We are supporting European initiatives to change the posting of workers Directive.
In 2015, the social fraud and social dumping action plan brought in 180 million euros. This is a record amount!
We are also tackling tax fraud. Close to a hundred officers have been recruited to the Special Taxation Inspectorate. That is a 25% increase in staffing levels. Concrete measures are being taken. We will continue to take action.
Thanks to these additional resources, an additional 448 million euros have been collected in 16 months.
Dear colleagues,
3. Renewed investment (PNIS)
In addition to our budget and the structural reforms, a strategy for investments is of the essence.
To a country, just as to a company, failure to invest will lead to decreased wealth and a hidden debt for the next generations to come.
I have launched a project for a strategic pact.
This is a project that identifies the various sectors with respect for the powers at each level.
Mobility, energy transition, digital agenda: these are some of the priorities to be addressed.
We aim to appoint a strategic committee composed of academic, economic and financial experts.
This plan must be achieved between now and 2030.
I am also counting of the support of non-political figures who will be able to play a role in rolling out the strategy.
It is my intention to identify the relevant projects and financing methods as soon as possible.
I am hoping for positive collaboration with the Parliament in this respect.
Arco
With regard to Arco, the coalition agreement is confirmed with regard to elaborating a workable regulation with a view to the partial compensation of natural persons who are members of certified financial cooperatives.
An action plan will be drawn up at the initiative of the Minister of Finance.
A task force will be set up to support the fine-tuning of the regulation.
The operational roll-out is scheduled to commence in 2017.
Security - Justice
Dear colleagues,
Our country may be one of the best places in the world for those seeking to be free.
To be free to love as they please.
To be free to criticize.
To be free to believe - or not to believe
To be free to hold a contrasting opinion, or to engage in political activity.
Nevertheless, our democracy was hit by tragic acts of violence this year.
Today, I would like to once again honour the victims of these attacks.
And our emergency response workers,
our police forces,
our security and intelligence services,
and our soldiers, whether patrolling the streets or on mission abroad.
I wish to thank them for ensuring our security and our freedom.
Dear colleagues,
In Brussels and in Zaventem, our convictions were shaken.
We must do justice to those who were dramatically hit by this tragedy.
Doing justice means mobilising additional capacity for our intelligence and security services.
In two years, we have provided an additional 640 million euros to strengthen security.
In total, over 1,000 additional officers will be recruited to strengthen the security services.
30 measures have been adopted to tackle the terrorist threat.
Terrorism-related house searches are possible 24 hours a day.
Telephone tapping has been expanded to facilitate the work of investigators.
And we will always respect the balance between the right to security and compliance with the rule of law.
We are aware of the challenges and we are taking action.
The “Canal” plan has been adopted. 485 officers are supporting services in seven municipalities.
Additional judicial staff complete the plan. And the initial results are apparent: 600 people have been removed from national registers and 57 people considered to be dangerous have been detained for questioning.
Dear colleagues,
Our work with regard to security has not yet been completed.
Legislation with regard to security cameras is being modified.
Additionally, security services are undergoing reforms in order to operate more efficiently.
The reform of the core tasks of the police remains an absolute priority.
Justice
We have pursued a proactive policy with regard to the digitalisation of our legal system.
The five pot-pourri laws that have been adopted have resulted in an enormous improvement in civil and criminal proceedings.
Court cases are processed faster, and the workload of our courts has been alleviated.
Almost 100 million euros have been freed up for investments and recruitment.
New vacancies have been announced within the judiciary for 455 magistrates and more than 1100 members of judiciary staff.
Legal aid has been reformed for greater accessibility, and to prevent useless appeals.
We are currently engaged in the analysis of a Master Plan for penitentiary institutions.
The government aims to reduce overpopulation in jails and to renovate the infrastructure.
The results are tangible: this year, our jails currently house 1,200 fewer inmates than they did last year.
Energy
With regard to energy, we need to develop a long-term vision.
We need to build up greater independence.
An effective energy mix must be our objective in this area.
Affordable electricity for both consumers and businesses is the aim.
The government is preparing for the phasing-out of nuclear power.
This is not only with regard to waste management, but also for the implementation of a 2030 national energy climate plan.
Mobility
Sustainable mobility requires constant attention. Public transport must become more efficient and coherent.
We aim to unabatedly continue reforming our country’s national railway company. We have one objective: to optimise customer-friendliness and safety.
Asylum-seekers
Our borders are the exterior borders of Europe.
Last year, our country demonstrated tremendous solidarity.
However, the trend has since shifted. In 2016, an average of 3,700 applications for asylum were submitted every month. This figure has since dropped to 1,500 a month.
The government has advocated a strong return policy.
This year, more than 4,000 asylum-seekers have been returned to their country of origin.
The deportation of criminals staying illegally in Belgium is another one of our absolute priorities.
Last year, more than 1,400 criminals were deported.
This is twice as many as in 2014.
We advocate solidarity with persons in need, and a strict deportation policy for those who would misuse our hospitality.
Foreign affairs - Defence - Development cooperation
Dear colleagues,
For several years, Europe has faced a sequence of shocks.
War and instability to the south of our external borders (Syria, Iraq, Libya) have resulted in migratory pressure not seen since the last century.
The pressure linked to the terrorist attacks on European soil is heightening anxieties and uncertainties.
The relationship with Russia is also raising questions and doubts.
And then, the British vote in favour of Brexit is indicative of a form of scepticism about the future of Europe.
Yet, this European ideal has for a long time been taken as a given.
At the Bratislava Summit, a necessary but fragile process to relaunch the European project was initiated.
We will play an active role to bring the European project closer to the direct concerns of citizens.
Belgium wants to be a loyal and reliable partner, with realism and without naivety.
In the community of the United Nations or within NATO, we choose to be responsible and play an active role.
For this reason, we are a candidate for a non-permanent seat on the 2019-2020 United Nations Security Council.
We also wish to create a short-, medium- and long-term future for our defence. This is the reason for our strategic vision.
We will fulfil the commitments made in Poland at the last NATO summit.
In the Council of Ministers, we have begun the analysis of the draft military planning law.
The Africa paper was recently submitted to Parliament. It sets out our strategy for this neighbouring continent, to which we are tied by history as well as the future.
Strategic sustainable development objectives are a fundamental aspect of our development cooperation policy.
Conclusion
Dear colleagues,
I have tried to present the state of our country, to identify the successes and to acknowledge the weaknesses that need to be corrected.
I particularly wanted to highlight the reform plans that are essential to boost confidence and to renew hope of a more secure future.
In the coming days, I will meet with the social partners in order to explain our decisions and to provide every opportunity for successful cooperation and harmony in labour relations.
Like you, I am well aware that our fellow citizens often face unrelenting anxieties.
The worry of losing one’s job or the fear of not being able to find one, the bills at the end of the month... But also terrorism and the feeling of insecurity.
21% of the population is at risk of falling into poverty.
Nobody here can be indifferent to this situation. And it is for this reason that we are so determined to make a success of the economic recovery and social cohesion.
“Overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life”. These are the words of Nelson Mandela.
It is also the reason for our actions. Because we believe that economic progress, job creation and social justice are inextricably linked.
We are taking action to produce results.
We are not content with managing the country in a piecemeal fashion or with aligning a succession of copy and paste budgets.
Our actions are part of a far-sighted vision of the future.
A future that we want to make better for our fellow citizens.
Finding a job, bringing up children, studying, looking after oneself and feeling protected by the authority of the State.
Our reforms are bearing their first fruit. We will continue to build on this momentum to further accentuate the positive results.
More incentives for employment and for initiative, more support for SMEs, more fairness and equity at the taxation and social level, more innovation and creativity.
These are the main elements of the plan that we want to put into practice.
Optimism without naivety. Confidence without illusions.
More than ever, we know that this country’s best asset is its citizens, their inventiveness and their generosity.
For this reason, we want a better future that is more secure and more prosperous. We want a more optimistic future.
As Saint-Exupéry said: “Your task is not so much to predict the future but rather to enable it”.
To make this optimistic future possible, I ask that you place your confidence in the Government.
