Federal government’s new budget agreement rejected by unions

After weeks of discussion, the federal government has reached an agreement on its budget for 2016. The main groups affected are civil servants, drivers of diesel vehicles and smokers.

The negotiations started with a deficit of €2.2 billion to fill. The costs of security following the Paris attacks in November and the costs relating to the refugee crisis were removed from the 2016 budget, taking care of €400 million.

Taxes on cigarettes will increase, as will diesel petrol, which will bring in an extra €70 million over the coming two years. Diesel drivers also face a price increase of €2 per 50 litres in 2017, and €3 in 2018.

The government also plans to introduce a tax on earnings derived from the sharing economy, such as letting out a spare room through Airbnb. These earnings are already capped at €10,000 a year, above which the activity is treated as a business.

Businesses can look forward to a change in corporate taxation. No details are yet available, but Unizo, the organisation that represents the self-employed, is arguing for a two-tier system in which companies can choose either a flat-rate 20% tax with no deductions, or remain with the current system of 28% with deductions.

Civil servants, finally, will have to work longer to achieve the same pension benefits. Years spent studying no longer count as service years when calculating their pensions. The system of saving up sick days until the end of a career will also be scrapped.

Christian union ACV chair Marc Leemans described the measures as “a new slap in the face for workers” which would be “counter-productive for the economy. This government is making people work longer, with tougher working conditions, for less purchasing power and less pension. The parties that defend that approach are turning their backs on the workers, civil servants and teachers, the sick and the disabled, the unemployed and pensioners.”

Photo: Ingimage