The Flemish government aims to save an additional €330 million this year, and will delay the indexation of wages and benefits – following the example of the federal government - to keep the budget on course towards balance, according to Flemish Budget Minister Ben Weyts (N-VA).
The Flemish budget was expected to register a deficit of around €3 billion this year, similar to last year. However, new figures indicate that the shortfall has increased by €680 million since the last budget formulation, threatening to approach €4 billion.
The primary cause of the increased shortfall is slower-than-expected economic growth.
Minister Weyts intends to take immediate action rather than wait for the next budget formulation in September. The government of Prime Matthias Diependaele plans an additional €330 million in savings, though precise details of these cuts are to be clarified in the coming weeks.
The Flemish government will also delay the indexation of wages and benefits by one month. Civil servants’ salaries will now be indexed in the third month after the trigger index is exceeded, rather than the second month. This adjustment is expected to have a budgetary impact of €40 million on Flemish civil servants’ wages this year.
The government has also established new, stricter rules for the September budget formulation. Ministers will be required to provide better justifications for their expenditure and specify where cuts will be made.
“Normally, no real savings are made during a budget adjustment, but this time we have already taken action because there is still a lot of work to do to put our accounts in order,” Minister Weyts said.
