Budget reporter Dan Biancalena’s introductory speech on Tuesday laid out his priorities for the budget, putting a particular focus on security. This includes safety in public spaces, housing, the drugs issue, inequalities, discrimination and the mental health of young people.
He noted that the Grand Duchy had, so far, made it through the pandemic quite well, especially compared with other countries. While GDP in 2020 had decreased by 1.8 percent, the was well above the Eurozone average of 6.5 percent. The labour market had actually grown by 2 percent, whereas in most other countries it had shrunk.
“On 31 October, we had an effective surplus of 96 million Euro in central government. While we shouldn’t immediately extrapolate from this snapshot to the entire budget year, it pleases me as budget reporter that [...] revenues are nearly 17% higher than at the same time last year.”
Most of the surplus is from taxes levied on production. Individual councils, too, will see an increase in means over the next few years. They are expected to have an average surplus of 249 million Euro between 2022 and 2025, compared with 190 million Euro in the four years before the pandemic.
Investments will continue to be a priority, even rising by 7.9 percent on average. Direct and indirect investments of central government between 2022 and 2025 should amount to 13.9 billion Euro. The 2022 budget will invest in humans and put an accent on community and solidarity, said Dan Biancalena.
This will include increased participation in the pension fund by 164 million Euro, another 367 Euro for the national solidarity fund, 54 million for the cost-of-living subsidy, 96.9 million Euro for the government participation in the costs of services for people with a disability and 1.3 million for the children’s fund, among others.
But there is also investment in the future, with 9 million set aside for the “data motorways”, an important element in the implementation of the 5G strategy.
The “National Commission for Data Protection” will see its funds increased by 10% to around 8 million Euro. This plays an important role in strengthening residents’ trust in institutions, said Biancalena.
Companies wishing to install electric charging stations can claim aids totalling 10 million Euro, and 48 million Euro are set aside for the tram, notably the expansion towards Cloche d’Or.
The environment will not be neglected, with 1.8 million Euro go to the “Energy Climate Plan” and 17.8 million Euro for the installation of wind turbines around the country.
The only sour note is the situation for Social Security. While 2022 the surplus was 1.2% of GDP, this will drop to 0.9% by 2025. This is not only due to Covid, however, but also the fact that the contributions are no longer what the country was historically used to and, on the other hand, the number of beneficiaries had grown considerably.
It was important, therefore, to ensure that our social security systems are strengthened for the future, said LSAP deputy Mayor Dan Biancalena. But he stressed that even without growth, pensions can be paid out for a further five years.
On Wednesday, Minister of Finance Pierre Gramegna will give further explanations on the budget, followed by reactions from the opposition.
