Following the presentation of the budget on Wednesday morning, the parliamentary group of the Luxembourg Socialist Workers’ Party (LSAP) expressed its disappointment regarding the fact that there are – as expected – no plans for a major tax reform. The socialists advocate for a reform of the income tax in particular. Nevertheless, the LSAP still welcomes the few tax measures that Minister of Finance Yuriko Backes did announce. As such, MP Yves Cruchten, the chair of the LSAP’s parliamentary group, tried to highlight the silver lining.
“The tax reform will come piece by piece,” Cruchten said, pointing out that “almost nine different tax measures” were announced on Wednesday “seven of which are part of our 21-Part-Programme.” He also explained that the coalition partners all agree that a reform of the income tax is necessary but “the Minister [of Finance] presented us a rather pessimistic long-term budget for the next few years.” For this reason, “we are supposed to remain cautious for another year.”
However, the LSAP has already decided that it will pursue its push for a major tax reform and will turn it into a campaign issue next year, Cruchten added.
The Green Party (Déi Gréng) would also have gone further regarding taxes. But like the LSAP, the third coalition partner will temporarily be content with the few relief measures that have been announced.
The chair of the Green Party’s parliamentary group, MP Josée Lorsché, stressed that “this is not a rejection of a tax reform.” Lorsché stated that the Minister of Finance said that “we cannot do it straight away because we need to cover the costs of several measures to help the people and businesses.” The MP made it clear that her party thinks that “our system is not just.”
MP André Bauler from the Democratic Party (DP) claims that “it is not a question of if, but rather when a tax reform can be carried out.” Both the Green Party and DP parliamentary groups also welcome the fact that investments will remain high.
“If we prepare the economy for the future, we strengthen the next generations and secure future sources of income,” according to Bauler.
The Christian Social People’s Party (CSV) has prepared its own project for a major tax reform, which would notably adjust the tax table for inflation. The co-chair of the CSV’s parliamentary group, MP Gilles Roth, slams the government’s plans, pointing out that “it is a budget with a €2.8 billion deficit.” Roth criticises that there will be no tax cuts, “and that after the state only took money out of people’s pockets for the past five years.” According to the MP, “this is a botched fiscal policy.”
Nevertheless, the CSV as well as the other opposition parties welcome the announced increase of the tax credits for single parents and workers receiving minimum wage.
The Pirate Party wonders where the 10% increase in state revenue is supposed to come from. MP Sven Clement stated that he thinks that “the revenue figures were embellished to make the deficit look less bad.” Clement fears that state revenues will not increase significantly, but expenditures will, “at which point the deficit will shoot through the roof.”
MP Fernand Kartheiser from the Alternative Democratic Reform Party (adr) stated that he would expect the state to restrain itself in difficult times. “Saving is not the same as austerity,” the MP stressed, arguing that “with spending of around 25 billion, there has to be room to make savings in some sectors or to set other priorities.”
The adr MP already has one sector in mind: Luxembourg could invest less in international development aid, according to Kartheiser.
As for the Left Party (Déi Lénk), MP Nathalie Oberweis criticises the fact that the government does not tackle structural injustices. After the budget presentation, however, she did find some positive points:
“Basically, we are relieved that investments remain at a high level. We also see that the government has included some measures in this budget that we had previously asked for, such as accelerated depreciation,” Oberweis stated.
According to the Luxembourg Consumer Protection Association (ULC), the budget “lacks a social aspect” and would leave the middle classes in particular out in the cold. Regarding taxes, the ULC thinks that the proposed measures are not broad enough. The budget “mainly strengthens the economy,” according to the ULC.”
Budget 2023 deposéiert: “Mat mir gëtt et kee finanzpoliteschen Hara-Kiri”, sou d’Yuriko Backes
