Parliament looks at the idea of deferring contributions to cushion indexation

Parliament looks at the idea of deferring contributions to cushion indexation
Credit: Belga

Federal Employment Minister Pierre-Yves Dermagne said on Thursday that he supported the possibility of deferring social security contributions payable by companies following the indexation of wages but stressed that this could not be done across the board.

Responding during a plenary session of Parliament to a suggestion to postpone the contributions, made by Christen Democratisch en Vlaams (CD&V) legislator Servais Verherstraeten, Minister Dermagne (Parti Socialiste, PS) said he supported the idea, "but we cannot do it in a generalised manner."

The debate on wage indexation returned to the centre stage in Parliament this week as the federal government pursued its work on the 2023 budget. UNIZO, a federation representing the middle classes in Flanders, sounded the alarm at the start of the week, suggesting the indexing of net, rather than gross, salaries as a possible solution.

This was taken up on Wednesday by the president of Open Vld party, Egbert Lachaert.

However, on Thursday the left-leaning majority in Belgium's Parliament swept away this possibility, with representatives of the PS, Ecolo and Vooruit parties weighing in on the issue.

"For the Socialists, blocking indexation is a no-no. Unraveling it is a no-no. Tax exemption is a no-no," said Christophe Lacroix (PS).

"The government has always been clear, there is no question of touching the index. For the Socialists, it's a red line," said Melissa Depraetere (Vooruit).

“It is taxation that needs to be at play here," argued Cécile Cornet (Ecolo). "We can reduce taxation on low wages and increase it for the broadest shoulders."

Dermagne said he had heard some people "question this purchasing power protection tool" but stressed that "questioning it is out of the question."

Indexation "must be allocated in full, and it will be," he insisted.

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