LSAP and Green Party support budget, CSV criticises high expenditures

Roth, the co-president of the party's parliamentary group, stated that "as a centrist people's party," the CSV values social cohesion in the country, which is why it backed the two tripartite agreements reached in 2022. However, Roth was much more sceptical of the government's financial policy. "Luxembourg needs stable public finances," Roth stressed, "but under current policies, public debt will reach €27 billion in 2026, or 29.5% of GDP." This is "dangerously close to 30%," according to the MP.

Related:State budget 2023: Minister of Finance hints at tax cuts, including for medium-income earners

However, Roth is against raising taxes to support state finances. He criticised the government for failing to pass on high state revenues to residents in the form of tax cuts in 2018, 2019, and 2020. The CSV is in favour of tax reform, which would include, among other things, adjusting the tax table to inflation, the MP reiterated.

Roth thinks that the state should "set priorities" for spending in the future, for instance in the areas of "mobility, housing, and health."

LSAP

MP Yves Cruchten, the head of the Luxembourg Socialist Workers' Party's parliamentary group, described the budget as "a budget of continuity with some new elements due to the crises."

The LSAP welcomes the increased investments. At €3.8 billion, they will account for 4.6% of GDP in 2023. The government clearly did not slash investments, Cruchten said.

In the past, there was some disagreement among the majority parties about the public debt, which will rise from €19.2 billion to €21.8 billion in 2023. It is even expected to reach 29% by 2026, meaning that the threshold of 30% is coming closer. The Democratic Party (DP) has made it clear that it does not want to cross this limit. However, the LSAP is not worried about this, according to Cruchten.

The LSAP also thinks that it would be best to stay below this threshold, if possible, he explained. However, his party considers it "an artificial limit" rather than "an insurmountable obstacle if further state interventions are required." Cruchten stressed that the LSAP supports a sustainable economic model and public healthcare that provides equal treatment to all people regardless of income.

Green Party

The parliamentary group of the Green Party (déi Gréng) has also confirmed that it will support the state budget during the vote on Thursday. However, MP and head of the party's parliamentary group Josée Lorsché acknowledged that uncertainties exist in the economic and the social plan, and thus also in the state budget.

The climate crisis and the related disasters "are becoming more and more expensive," which is why the Green Party welcomes measures to accelerate the energy transition, such as "the VAT reduction on solar plants and the increased grants for energetic renovations."

"Electromobility is the future and rightly so," Lorschée stressed, which is why the Green Party thinks that the state's revenue from "fuel tourism" is "unsustainable." For this reason, the state must find alternative revenue sources "sooner or later," according to Lorschée, who added that the same also applies to revenue generated through taxes on tobacco products.

The Green Party MP welcomed the fact that Minister of Finance Yuriko Backes hinted at potential tax cuts in spring, under the condition that the state will dispose of the required financial leeway. "The Green Party is looking forward to the Minister of Finance's announcements," Lorschée said.

In this context, the MP demanded that Luxembourg change to a system of individual taxation. By doing so, "it would no longer matter whether a person is unmarried, a single parent, married, or in a civil partnership." This would be "more of a socio-political change than a social one," according to Lorschée. Changing from one tax bracket to another "does not significantly reduce the risk of poverty for people with very low incomes." People with high incomes "benefit more from it," the MP stated.