Belgium's federal government is considering a series of new tax increases and spending cuts affecting healthcare, pensions, social benefits, and businesses as negotiations over the federal budget remain deadlocked.
Following Vooruit's rejection of the latest budget proposals on Thursday evening, Prime Minister Bart De Wever (N-VA) is not expected to resume negotiations with his deputy prime ministers until next week. According to Nieuwsblad, discussions will continue on the basis of a 78-page document outlining a wide range of measures aimed at reducing government expenditure and raising additional revenue.
Healthcare is expected to face the biggest cuts, with savings of around €4 billion under consideration. Among the proposals is an increase in patients' out-of-pocket contributions for GP consultations, potentially rising from €4 to €10. For patients entitled to increased healthcare reimbursement, the contribution could rise from €1 to €5.
The government is also considering restricting access to the increased reimbursement scheme, which currently benefits one in five Belgians. Changes to income thresholds and eligibility criteria could help limit the increase in consultation fees.
Meanwhile, additional measures targeting people on long-term sick leave are expected to generate €750 million in savings by encouraging a faster return to employment.
VAT increases
The government has abandoned the idea of raising the standard VAT rate from 21% to 22%. Instead, it is considering targeted increases expected to generate €600 million.
VAT on firewood, flowers and fertilisers could increase from 6% to 12%, while hotel stays, camping accommodation and holiday rentals could see their rate rise from 12% to 21%. Concert and festival tickets could also become more expensive.
However, these proposals have already prompted opposition from industry representatives, and some measures could still be dropped. MR leader Georges-Louis Bouchez has insisted that everyday shopping must not become more expensive.
The government also wants to raise €1 billion from the wealthiest taxpayers. Around half of that amount would come from management companies, which are often used by business executives and doctors for tax purposes.
Private foundations and owners of multiple properties could also face higher taxation, particularly those owning four or five properties or more.
Pensions and social benefits could be affected
Pensioners could also be affected by the proposed measures. The government is considering freezing their holiday allowances for several years, meaning these payments would no longer be adjusted for inflation during that period.
De Wever is also proposing an increase in contributions on the highest supplementary pensions to compensate for a €500 million shortfall in the savings expected from the pension reform.
Unemployment benefits and social assistance payments could also be affected, with inflation-linked increases potentially delayed by several months. Other measures include restrictions on flexi-jobs for people already working four-fifths of a full-time schedule and a reduction in business subsidies, expected to save €400 million.
Further savings in migration and tax reform
The government is also seeking €500 million in additional savings in asylum and migration, notably through faster returns and a proposed five-year waiting period before newcomers can access social assistance.
Meanwhile, the planned tax reform, intended to increase workers' take-home pay, could be scaled back by €500 million to reduce its estimated €4 billion cost.
Politicians themselves could also face spending restrictions. Proposals include freezing parliamentary funding and reducing the number of MPs in the Chamber of Representatives from 150 to around 140.
However, the latter measure faces opposition from MR and Les Engagés and is unlikely to be included in the final agreement.
