In conversation with RTL on Saturday, Finance Minister Gilles Roth outlined his focus on a sustainable state budget while announcing further tax reforms designed to increase social justice in Luxembourg.
On Saturday, Gilles Roth, the new Minister of Finance from the Christian Social People's Party (CSV), was a guest on the latest episode of RTL's 'Background' series. During the interview, he outlined the four key areas he intends to focus on after having taken on a role in the Frieden administration: the sustainability of state finances, people's purchasing power, the competitiveness of businesses, and the appeal of Luxembourg as a financial hub.
"We know that we're coming out of a tough situation", said Roth while further stressing that in their former role as an opposition party, the CSV voted in favour of all tripartite measures taken in recent years. Roth emphasised that his ambition for the future is even greater political consensus on such pertinent issues.
Tax reforms to relieve loan burden
Roth argued that the tax relief measures implemented by the Frieden government, through inflation-oriented adjustments of the tax scale, are helpful for people paying back housing loans.
However, labelling this as insufficient, he announced that further tax cuts for people with loans are underway. Roth has already met with officials from both the Financial Sector Supervisory Commission (CSSF) and Spuerkees Bank to discuss loan conditions.
Although he acknowledged that there is little wiggle room, Roth explained that they are primarily looking at ways to extend bridge loans while being cautious of the speculation potential that this might engender. Another possibility that the Finance Ministry has considered pursuing would be to potentially replace the capital that people need, in order to take up a loan or mortgage, with state guarantees.
Resilient budget to ensure social justice
Another central goal of the tax reform, underlined Roth, is increasing social justice. The reform provides relief to low- and middle-income households, as well as the A1 tax class, according to the Finance Minister.
While the CSV sought to increase the top tax rate, Roth contends that every coalition agreement represents a compromise, which is why the policy will not be implemented during in this legislative period.
As for the state budget, the CSV politician argued that the selection of projects that the government supports should be more rigorous - to avoid unexpected and excessive costs, as has happened in the past. A resilient budget able to finance social measures can only be achieved through strong economic performance, Roth said.
In the upcoming weeks, the Minister must address several laws slated for a vote in the Chamber of Deputies before the year's end. Following that, Roth emphasises, the 2024 budget needs to be formulated in a manner that ensures revenue and spending are not brought even further out of balance.
In closing, the Finance Minister assured listeners that the CSV entered the government well-prepared and he expressed his confidence in the party's ability to implement functioning policies.
