Proposition 51K1746

Logo (Chamber of representatives)

Projet de loi contenant le premier ajustement du Budget général des dépenses de l'année budgétaire 2005.

General information

Submitted by
PS | SP MR Open Vld Vooruit Purple Ⅰ
Submission date
April 28, 2005
Official page
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Status
Adopted
Requirement
Simple
Subjects
budget national budget

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Discussion

June 22, 2005 | Plenary session (Chamber of representatives)

Full source


President Herman De Croo

If I have to start examining the body language of those who abstain from applause, then, of course, new problems arise. Their

Everything is good that ends well. On the agenda, we have the discussion of the project articles adjusting the budget of the Roads and Means for the financial year 2005; we begin with the general discussion.

I have included in the general discussion the gentlemen Goyvaerts, Devlies, Wathelet and Van Biesen.

Mr. Goyvaerts, can you start? Then came Mr. Wathelet, then Mr. Devlies and then Mr. Van Biesen. We’ll see who else will sign up.


Hagen Goyvaerts VB

Mr. Speaker, for this distinguished company, in which you apparently were looking for a first speaker, I would like to be sure to draw the sprint. That in itself is not a problem.

As we all know, today is the first budget adjustment of the year on the agenda. For all clarity, colleagues, in fact, we are conducting a debate here about nothing due to the fact that the entire context of the initial budgetary control is completely outdated. In fact, we are conducting a virtual debate because the federal government summit held its first budget control in the week of April 18th, meanwhile a long time ago, with an organ point in the night of April 22th. During the press conference that followed, another message of victory was sent to the world, in particular that the budgetary control had gone almost painlessly and that the public budget 2005 was re-balanced.

This government showed that the job was done and that it could continue to work on its socio-economic reforms. Everyone knows, meanwhile, that since the end of April there has been an economic collapse, even to the extent that Verhofstadt as head of government had announced that from this week onwards a second budget control would be carried out. That date has been postponed to the beginning of July, in the hope that tax receipts will continue to come in. That is apparently the only cut-off that this government currently holds to so that again an unbudgeted tax bonus can soften the painful budget round.

Let’s keep on with today’s topic, colleagues: the first budget control that, as I have said, has gone almost painlessly for this government and has re-assured a budget balance, despite the calculations of the Institute for National Accounts, which showed that the Belgian economy had shrunk by 0.02 percent in the first quarter and thus in fact indicated a zero growth for the first quarter.

When drawing up the budget for 2005, Mr. Minister, you had assumed a growth of 2.5%, and for the pre-existing budget control you kept up with the forecast of a growth of 2.2%.

In order to capture any growth delays, you provided a buffer of 200 million euros, an amount that we can hardly believe would have been sufficient to amortise a further economic downturn on your budget, ⁇ not if that downturn would be greater than 0.2%.

In addition, during the budget control, the government received a non-budgeted tax bonus of approximately €1 billion and a bonus of €155 million due to the favorable interest rate evolution. So this time it was the tax revenues from VAT and the corporate profits that “saved” the budgetary control. In other words, it is a consumption bonus — because increased VAT revenues are often associated with increased consumption — which has saved fiscal control.

The contribution of the Flemish Region has also caused Flanders to once again depreciate the federal budget. As everyone knows, the federal budget has always had a deficit in recent years and that is not different for 2005, even with this first budget control. In any case, these tax incidents have helped to close the gap in social security. That is not to say, colleagues, that the deficit in social security has again been eliminated by putting the deficit to the nering or by making the expenditure according to the income.

Your praiseful words, Mr. Minister, about the exceptionally achieved performance of the budget balance had not yet been uttered or a series of unhealthy reports on economic growth caused the vote to turn around and forced this government to resume its budget work. We still remember — I mean 14 days or a week after the end of the budget control — how the OECD came up with a number of figures for the day in its economic outlook. The OECD had calculated that growth for 2005 for our country would be just 1.3%. The structural budget deficit would also amount to 0.4% of GDP. That, of course, was already a first major signal that it would be very different than a budget balance.

The OECD also points out the urgent need for structural measures rather than the repeated one-off measures to address the budget deficit. The OECD also points out the higher public spending and calls for a reduction in this regard.

After the OECD, the Federal Planning Bureau came with even darker prospects. It stated that for this year there would be a growth of 1.7%, which is a full percentage less than in 2004. The budget deficit would land at 0.5% of gross domestic product, equivalent to 1.5 billion euros. The Agency continued the line to 2006, where the deficit would reach 1.5 % of gross domestic product, approximately EUR 4.6 billion.

The growing deficit is mainly caused by the continued strong increase in spending in the health sector, pensions – I refer to the recent report of the Aging Committee – spending in employment policy and the NMBS.

When we analyze the figures from the aging report, which was made public last week, we only find that the costs of aging are increasingly heavy. In 2002, for the period 2000 to 2030 and this year after year, the financial impact was calculated at 3.1% of gross domestic product. Only three years later, the financial impact for the same period is already estimated at 5.6% of GDP or an amount of 16.5 billion euros. In a three-year period, the financial impact has almost doubled.

The Plan Bureau also points out that income from the personal tax will decline in the coming years. We must not forget that the government has implemented a reduction in the personal tax. However, this has a price. For 2006 this will have an impact of 1.7 billion euros. That amount of lost income is not to be neglected. The one-off measures also have an exhaustive character.

So the Planning Bureau came up with a scenario that would require the government some more political courage to turn the tide. Furthermore, we must not forget that we are more than halfway the year and that generally speaking, the months of July and August are traditionally not economic high-flyers. There will undoubtedly be additional income in terms of hospitality and tourism. Consequently, only the autumn remains to feel the full effect of the additional measures.

Following the OECD and the Planning Bureau, the High Council for Finance also came with few pink-colored communications after the completion of the first budget control, the so-called painless controls and the budget-in-balance psychology. The High Council for Finance announced that a budget surplus of 1.5 % of GDP must be recorded by 2011 in order to be able to equitably cover the costs of aging.

We all know that the pot of the Silver Fund, which is constantly devoted, can only be paid out on condition that there is a budget surplus. Otherwise, we will have to go back to the state debt box. Then one can only state that it will only rise as one empty the Silver Fund. In any case, without intervening measures, the High Council of Finance expects us that in 2001 the budget balance could be 2.5% lower, so that instead of a surplus there is a deficit.

The stability program is also important to mention. That should be one of the guidelines of this government. It predicted a surplus of 0.3% in 2007. Given the current economic situation, this is no longer a matter of course. Consequently, in order to ⁇ this goal, the government will have to strike more than a tooth to close the gap of the many billions of euros.

Yesterday, there was also the Conjuncture Survey of the VBO. A survey of employers in conjuncture-sensitive sectors showed that this year’s annual economic growth would be only 1% year-on-year. After the completion of the budget control, which shows that it is not going in the right direction, the VBO has again felt with the reality of the employers.

The survey also clearly shows that the conjuncture picture is becoming increasingly darker. The export of the Belgian, read the Flemish companies because they take the lion share of the export for their account, is increasingly under pressure due to a deterioration of the competitive position of the companies in this country due to the weak dollar, on the one hand, and the increased competition from both the former Eastern bloc countries and from the East, on the other.

Even the Governor of the National Bank is not really optimistic, colleagues. He points out in his explanation of the spring figures that the economic growth in our country is structurally too low. He assumes that economic growth in this country could still be at 2% but apparently that figure cannot be kept. Guy Quaden commented on this condition during his press conference on 3 June 2005, just 14 days ago.

Another element that recently came to attention was the rise in public debt. We have always been able to see in the figures that the public debt is permanently declining. This year, this light could be turned around. For the first time in 12 years, government debt could rise again. The National Bank calculated that, if the government did not intervene in the 2005 spending, the public debt would rise by 0.4% to 95.9% due, among other things, to the acquisition of the debts of the NMBS worth 7.4 billion euros. Even though government debt in 2004 reached its lowest level since 1981 – which we do not dispute – it still remains much higher than the euro area average, which is 71%. That is still a lot lower than the 95.9% of Belgium. There are only two countries in the eurozone that are ahead of us, and that are Greece with a government debt of 111%, and Italy with a government debt of 106%.

Nevertheless, the government continues to pretend that the budgetary situation can be controlled with some surges. I can’t get rid of the steady impression that achieving the double objective of fiscal balance in 2005 and a budget surplus from 2006 on the one hand and the further reduction of public debt on the other, will require a little more than some adjustment of the current budget. Liberals and Socialists have been serving in this country for six years and have, in my opinion, had all the possibilities to determine the policy.

I have to make a correction. As I read in a yearbook, I have found that the Socialists have been in government for 17 years. Politics in the past may apparently be attributed in part to the socialist coalition partner.

Meanwhile, over the past six years, the government has had a not insignificant interest rate advantage of many billions of euros. According to one source it is about 2.5 billion euros, according to the other source it is about almost double. Nevertheless, we note that the tax pressure is still roughly at the level of 1999. There is ⁇ a slight improvement to be observed, but in fact it is about numbers after the comma and so one can speak of a status quo. Therefore, we can ask a question: what happened to that interest bonus of many billions of euros?

One thing is clear: if the government means it with its budget surplus, I think the time has come to start structuring the budget surpluses, in order to avoid further deflation of the public finances. I think that in recent years there have been opportunities for this in economically better times and ⁇ also in economically smaller times. Now, however, we are in economically bad times and the control of spending will therefore be a crucial element.

There have also been studies on this. For example, the ING-bank calculated that in the event of unchanged policies, public spending, or primary spending, could increase in the short term from 42.3% — the case was in 2003 — to more than 48%. This would slowly bring us to a historical record. Those of us who have previously studied economics know that higher government spending does not automatically lead to more prosperity for the community. But the same is true here: if no intervention is made, the budget deficit will rise again or the taxes will need to be raised.

Colleagues, precisely for an increase in taxes, due to the high fiscal and parafiscal pressure, there is no room. Furthermore, the high level of taxation is already hindering economic growth, as the incentives to work, to more investments and to renewal are more or less germinated.

For 2003, Eurostat calculated that Belgium with a tax burden of 48.1% is still among the European top. Only Sweden and Denmark have a higher tax pressure, while the European average is “only” at 41,5%.

As I just said, this coalition of liberals and socialists has reduced the tax pressure by only a few percentage points compared to 1999 and we are therefore at the level of a status quo. Furthermore, we can confidently conclude that there is absolutely no global reduction in the tax burden with Verhofstadt as prime minister. I think that has become clear to many of us now.

In addition, we note that over the same period, Mr Tommelein, the fiscal pressure in the European Union has decreased by an average of 1.5%. That in itself is not a spectacular figure, but it is, of course, much more than the percentage points that purple and purple-green have obtained. That is the reality, but that is strange in itself.

Well, I think we should also not expect a dramatic decrease in the tax burden, because we find that in the policy of this government, although the direct tax burden is reduced, it is almost immediately compensated by an increase in indirect taxes. Honestly, I see nothing in the government policy that in 2005 would indicate that there is a change in this regard.

This government may still speak of luck, because without the historically low interest rate, the fiscal pressure would have even increased significantly in recent years.

In the economic context, we should not spread stories. Everyone knows that the economy is falling. This is a realistic given. Even for the second quarter, the European Commission gives us little hope. It calculates, assumes or estimates growth in the euro area between 0.1 and 0.5%. For the current year, for the whole year, the European Central Bank also expects only 1.4%. This is in the same order of magnitude as the forecast of the OECD and the Planning Agency. Their

It is also of the size order with which the VBO came for the day yesterday. All the arrows of this government were, of course, aimed at the VBO because it as a messenger that brings forward elements that come forward from the backbone, being the employers. However, it is important that these data see the light of day. This should also indicate that this government has a lot of work to do.

Consumer confidence is at a very low level. This is the lowest level since October 2003. I want to refresh your memory, colleagues. October 2003 was the moment when Ford Genk unexpectedly announced that it would cut 3,000 jobs. The fact that consumer confidence was undermined at the time was probably a consequence of that given. In May 2005 we were at the same level as in October 2003. Consumers are currently expecting a deterioration of the economic situation. This will undoubtedly lead to higher unemployment. Their

Business confidence also reached its worst low in the past two years in May. There is a decline in almost all sectors, with a slight exception for the construction sector. Their

During the preparation of my speech, I took a look at the bankruptcy figures for the month of May. In May, 706 companies closed the books. If we look at the figures of the last five years, that is again an absolute record. Since 2000, there have never been as many firms bankrupt in May as this period, namely 706. Their

Employee confidence is also falling sharply. This is evidenced by the Randstad Industrial Barometer. More than 50% of respondents responded negatively to the question of whether the time is favorable to change job or to find work. Their

Furthermore, there are considerable regional differences. In Flanders, 41% of Flemish people are pessimistic about the opportunities in the labour market, but on the Wallish side that is 64%. I say that only to indicate how the two labour markets are growing further apart.

We can continue to look at and analyze a number of barometers for a long time. In any case, they all show the same trend. Mr. Minister, we are now talking about budgetary control and, strictly speaking, we should actually limit ourselves to see if this budget remains on course. This is the purpose of budgetary control. Their

We need to look at the time when the budget control took place. That was just after the debacle around the file of the split of the electoral district Brussels-Halle-Vilvoorde. So I can quite imagine that the atmosphere at the government was not about to blow each other a little overhead with a number of overwhelming budgetary measures.

Instead of putting the slope slightly higher with the outlook for 2006 and the beginning of budget surpluses and making the objectives slightly more ambitious, this government has opted for a facility solution. This government — I repeat it — has taken advantage of the €1 billion non-budgeted tax bonus during this budget control. Thus, the job was completed very quickly without having to hurt each other or go ideologically for the feet.

Despite the subsequent statements that everything went well and that the good intentions to ⁇ budgetary balance were ⁇ ined, we do not know what the situation will be on 31 December 2005 and to what extent those expenditure and income will actually be balanced. In that regard, we know that all the predictions that were made no longer exist. In June 2005, we could forget it.

We also note that the economy continues to crash on jobs. At the end of April, the RVA numbered 573,100 job seekers or 29.501 more than the year before. This indicates that this government is still far from its ambitious goal of creating 200,000 additional jobs. As for job seekers, we are in a very strange situation. Regional differences are increasing. The unemployment rate in Flanders is 8%, in Wallonia it is 18% and in Brussels it is 21%. The big difference between Flanders, on the one hand, and Wallonia and Brussels, on the other, must make us think, especially when it comes to employment policy. Both regions, in my opinion, require a different approach. This situation weighs very badly on the conjuncture.

As I said at the beginning, the cutting and sticking work of the first budget control was a measure for nothing. The second budget control, which would normally start this week, does not announce itself as an easy exercise. On the contrary, it will be a very different cake. This coalition of liberals and socialists will have to look for measures that contribute at least 0.4% of GDP annually.

In September then follows the drafting of the 2006 budget, ⁇ the most difficult of recent years. The budget balance will be under great pressure. You know, Mr Minister. Your cabinet may have all sorts of instruments and charts that indicate the evolution every day. That may be the reason why you have been tempted to make a number of statements about the easing of the budget balance. You put the door on a hole for a budget deficit. You argued that a small budget deficit of 0.5% is not a catastrophe. At that moment, you’ll break away from the mantra of purple, especially the psychology surrounding the budget balance. Your judgment was rightly opposed. The proclamation “Consumers, everything is going well and spend your savings on the economy” was squeezed in the germ for a moment. Their

You, of course, subsequently nuanced your statements, but they have at least the eyebrows do frons. As the saying goes, where there is smoke, there is fire. Probably something is hanging.


Minister Johan Vande Lanotte

I have not nuanced my statements. I repeated what I said in the newspaper, literally. Without a title, that is something else. I later said the same thing as I said in the newspaper. It is identical.


Hagen Goyvaerts VB

Well, you may have said the same thing, but you may have explained the context a little differently in the sense that you later said that the goal remains to go ahead of the budget balance.


Minister Johan Vande Lanotte

This is written literally on the first page of the Standard. The reason why is also in there. I said the same thing on television. Without a title. The title is different, that’s the difference.


Hagen Goyvaerts VB

From the title I don’t know if the quote-unquote was, or it could be attributed to you, because you know that a newspaper of a title makes what it wants. On the other hand, it was curious that in the whole context of the budget deficits that come up and with the fact that the budget balance is still difficult to maintain — you know, of course, very well that Europe could not allow budget deficits to build up — you had put the door on a very small circle. Let us not be more Catholic than the Pope: if it ended at a small 0.5 it would not be a catastrophe. I think that was the context we were talking about. Their

It also made me immediately think of Fons Verplaetse, the former governor of the National Bank, who also said at the time that a small budget deficit could not be a problem. If Fons Verplaetse was then asked what a small deficit was to be, he could not immediately say whether it could go to 0.1 or 0.9. In that context, I found it surprising that a Minister of Budget analogously, in a way of speaking, walks that track. We know how it ended at that time. I do not accuse you, Mr. Minister, that you would like to do the same, because the snowball effect has had its price there. Alleszins makes it clear to the outside world, to the consumer, to the man and woman in the street, to the entrepreneur, that the end of purple has come in the sense of the end to the all-goat-good-story. So for Verhofstadt it is time for a plan, a new plan. He called it, I think, the global plan. Their

The terminology “global plan” made me think of Jean-Luc Dehaene. When Jean-Luc Dehaene spoke of a global plan, he had only one goal: to save and again to save. There was nothing else for him at the time. It was the time of the Maastricht standard, so at that time it was the matter. We should call a cat a cat, colleagues: the plan of Verhofstadt also revolves around savings. It is about hard savings, because the time of one-off measures is over. The time has passed from the sale of government buildings, the time has passed from the overthrow of pension funds. If I can believe the current Governor of the National Bank, the truck box of this government is almost exhausted. I even think the governor also talked about the sold out of Belgium. Therefore, it is to look forward to the global plan of the government-Verhofstadt and what that plan will bring. Their

What especially requires our attention is what political compromise this global plan will contain and what community compromise it will contain. Of course, we are not in the simplest order. In other countries in Europe, the government in power must only make a political compromise.

It is liberal against socialist, it is liberal against Christian-democratic, or it is Christian-democratic against liberal. These are the considerations that need to be made. In this country, an additional compromise is added, which is the Community compromise. Therefore, this always ensures, either that the invoice enters the height, or that there is no compromise possible. So the PS wants to introduce a general social contribution. The liberals do not want to know this. Liberals want more taxes on consumption. I refer to the idea of Verhofstadt to raise the VAT, but the PS does not want to know about it. It might be a robot. Yesterday I discovered that word in the press, a robot ax. I do not know with God where it all goes, but whatever name one gives the child, it is all about an increase in burden. After all, no matter how it turns or turns, a tax remains a tax. In short, we are very curious, colleagues, where this government will land. In any case, if we are talking about the month of June - it is the exam period for all students - and if we can say it in educational terms, then I think we can confidently say that you have definitely failed before your first budget control, Mr. Minister. I am also almost certain that the re-examination of the July budget control is a forerunner for a second seat in September. Then undoubtedly the cat will be on the rope for this government. The question will only be whether or not the cat has fallen from the rope.


Melchior Wathelet LE

Mr. Minister, in the Government Agreement of July 2003, you pledged quite firmly to maintain the budget balance for three consecutive years, 2004-2005-2006, and then to generate surpluses in 2007. At least that was the intention.

The challenge of this year’s first budget adjustment is obviously to maintain this budget balance. You proudly confirmed this goal in April last year. However, since then, specialized institutions (Federal Plan Office, National Bank) have ⁇ a deficit of 0.5% of GDP. There would be a hole in the cash of approximately 1.5 million euros. You have psychologically prepared us for a possible budget deficit, stating that it was not so serious and that it could happen. You have implicitly told us this, and you have thus tried to insert this type of reflection into the discussion. You’ve even been reassigned quite quickly by members of your majority, in particular by Mr. Bart Somers who reacted clearly, recalling that budget balance was something that one could not trade on, that one could not deviate from.

How can this deterioration be explained? Why are the indicators now all down and for some really worrying? You had based your budget forecasts on a 2.2% economic growth scenario in 2005. However, since then, it has been revised downwards and we can read various figures: 1.7 for the Plan Bureau, 1.4% for the National Bank. Furthermore, the FEB estimates of the last few days have all interpelled us because they announced a growth rate of 1% at the maximum.

You have seen a deterioration of the situation. Who could not have felt it? Economic growth was clearly negative in the first months of the year. Even in April, when you planned this budget adjustment, the signals were already bad. So, anticipating this deterioration, you created this little wool bottom of 200 million euros. Your initiative was good. It was in the right direction, but at the same time it can only be touching. In fact, according to the latest forecasts, more than 900 million euros will be needed to amortise the slowdown in growth.

As a result, Mr. Minister, we can clearly say that the first adjustment was biased. It has even been somewhat out of fashion for a few weeks as you are announcing yourself a second fiscal control year, which you have postponed to the beginning of July, waiting for additional statistics on tax revenues. I would be tempted to interpret this postponement as a confession of failure since, in the current state of things, you are not able to present this budget in balance, given the new elements I have just developed. In any case, I hope that on the occasion of this second adjustment – if it happens, but I assume that yes since you have committed yourself – you will adopt a more reasonable attitude and you will rely on the most realistic growth prospects, i.e. the most recent ones, those that stick the most to the current reality.

President: Jean-Marc Delizée, First Vice-President Voorzitter: Jean-Marc Delizée, eerste ondervoorzitter. I doubt, in fact, the effectiveness of a third budget adjustment which, in my opinion, is not necessary.

Mr. Minister, on the occasion of this debate, I would like to draw attention to the other components of the budgetary framework of the Government Agreement of 2003 to which I referred at the beginning of my speech. In addition to ⁇ ining budgetary balance until 2006, you had also made other important budgetary commitments. I would like to briefly return to some of them, namely the growth rate of healthcare expenditure, the observance of the financial balance of social security, the feeding of the aging fund and the reduction of the debt rate.

1 of 1. The growth rate of healthcare spending.

In 2004, this growth rate reached 7% in real terms, which is much higher than the 4.5% standard initially set in July 2003. For this year, a deficit of €70 million in the healthcare sector is already forecast due to the sluggish spending on medicines and the surplus growth of certain fees. The growth rate will again be surpassed.

2 of 2. The financial balance of social security.

In the July 2003 agreement, you were committed to ⁇ ining this financial balance of social security. This goal has never been achieved. Social security had a deficit of 0.1% of GDP in 2004; this deficit will be the same in 2005.

Fortunately or unfortunately, the Prime Minister has an idea. He wants to compensate for these reductions in employer contributions with an increase in VAT. Mr. Minister, you have stated that you do not understand why you would oppose such measures. I don’t want to betray your position by saying that. Onkelinx and Mr. Reynders, they, clearly said that they were opposed to this increase in VAT.

by Mr. Reynders said: “Rise in VAT, I don’t think it’s the track to be privileged.” As for Ms. Onkelinx, she said: “I’m not in favor; it would yield too little to the state treasures and it would destroy too many jobs.” by Mr. Reynders even took the counter foot; he was up to advocating VAT reductions, ⁇ in the horeca sector at European level.

Fortunately, Mr. Reynders and Ms. Onkelinx are pleased that the Prime Minister has ideas. This becomes information in itself: the prime minister has ideas! It is already good!

The Minister of Justice, deputy prime minister of this government, said: “The merit is to have launched the debate.” Regardless of whether the prime minister’s ideas are good or, in any case, if they are directly beaten down by the members of his own government, his two French-speaking deputy prime ministers, the important thing is that he has ideas. We are finally reassured about the Prime Minister’s health! He is able to have ideas.

In addition to these two French-speaking Deputy Prime Ministers, the scientific world has also expressed its opposition to the proposal due to its anti-redistributive repercussions, the flight of consumption abroad, the pressure it will exert on the price spiral and low wages. These are the same arguments that both Ms. Onkelinx and Mr. and Reynders. Furthermore, based the alternative financing of social security on VAT revenue alone is obviously very precarious.

The Minister of Finance has understood this well since he proposes to introduce now a corporate value added tax instead of an increase in VAT; this is ⁇ the first step towards a generalized social contribution that can not be called like that, of course.

3 of 3. The Fund for the Ageing Fund.

Currently, the reserves of this aging fund amount to 12 billion euros, which is higher — it must be admitted — than the 10 billion fixed in the government agreement. I really look forward to this effort. However, you must accept, as I do, Mr. Minister, that in its latest annual report, the Study Committee on Aging revised the budget cost of the aging population between 2000 and 2030, especially for the current period. It is important to take this element into account. It was mainly in the period from 2000 to 2010 that the revisions were revised upwards. These would increase from 4.9% to 5.6% of GDP during this period.

This growth should be taken into account. The most recent elements should immediately be incorporated into the budgetary outlook. The government must take these figures into account and make a revision of the targets it has set for itself regarding the feeding of the ageing fund. The Fund is defined as a financial reserve set up specifically to absorb the budget shocks of ageing as stated in the Government Agreement of 2003.

If experts believe that the shocks will increase, I think it makes sense to adjust and feed the fund accordingly. What is more normal! What more responsible for our future generations and to face the challenge of tomorrow’s ageing! 4 of 4. Reduction of the debt rate.

Along with the goal of generating fiscal surpluses from 2007, after the three years in balance, the government had also committed to reducing the debt rate below the level of 90% of GDP by the end of 2007. In 2004, the reduction of the debt rate was higher than required by the Stability Pact. However, according to the National Bank’s estimates, the debt rate is expected to increase in 2005. This would increase from 95,5% to 95.9% of GDP. The target would not be achieved, but a reversal of the trend at the level of the debt rate would be seen. In other words, not only is the goal not achieved, but the curve also changes direction.

You could — it is true — justify this increase in the debt rate by the recovery of the SNCB’s debt. Nevertheless – I give you my interpretation here – your primary surplus is now far too small to absorb any negative shock on public finances, whether it be a debt recovery operation or a slowdown in growth. A primary balance of 4.5 does not allow to cope with this type of budget shock.

In addition, although the gap between the debt rate of Belgium and that of the euro area has been significantly reduced, in recent years, the Belgian debt rate remains among the highest since it is 25 percentage points above the euro area average.

In conclusion, Mr. Minister, everything leads to the belief that you will not be able to close this year with a budgetary balance. In addition, you are unable to meet other commitments – I have demonstrated it – taken as part of the Government Budget Agreement for 2003. I mean as proof the growth rate, healthcare spending, the financial balance of social security, the reduction of the debt rate. In addition, the Federation of Businesses of Belgium announced yesterday that our country is on the brink of recession. For my part, I believe that the public finances predict a real crisis for tomorrow.


Carl Devlies CD&V

Mr. Speaker, Mr. Minister, dear colleagues, the first adjustment of the 2005 budget shows that even with an economic growth of 2.2 percent, as is assumed in the documents, there is a deterioration of the 2005 budget. Furthermore, the documents submitted show that the forecast for 2006 is also developing ⁇ negatively. At the same time with these figures, one can conclude that the content of these documents shows that the active welfare state is indeed failing. Unemployment continues to rise, job creation in the market sector was negative in 2003 and very limited in 2004. The few jobs that add to the total are subsidized jobs. We are, therefore, very far from that active welfare state which was initiated by the government-Verhofstadt I in 1999.

However, Mr. Minister, you intended to do something about this, together with your former colleague in the federal government, Minister Vandenbroucke. You had proclaimed 2004 to be a rope year, in which you would ensure that a structural balance would be achieved and in which there would also be a reversal in the labour market. We now know that this did not happen in 2004. On the contrary, after the establishment of a structural deficit in 2003 of 0.9 per cent — I am based on the data of the National Bank, which stated that there was a structural deficit in 2003 of 0.9 per cent — there was again a structural deficit in 2004 of 0.5 per cent, while you here, Mr. Minister, during the discussion of the 2005 budget in December, still assumed that there would be a structural surplus of 0.2 per cent. Well, there is a difference of 0.7 percent, as the National Bank determined that there was a structural deficit of 0.5 percent.

By the way, I was able to learn from the recent data of the National Bank that in the year 2004 for 1.6 percent of GDP non-recurring factors were present in the budget and that this is again the case for the year 2005.

However, the number is more limited. It is about 0.8% – yet still 0.8% – non-recurring factors in the 2005 budget.

Despite the presence of these important non-recurring factors, the federal budget for the year 2005 was submitted with a deficit of €1.8 billion, which now, following the budget revision, rises to €2.2 billion. I refer to pages 3 or 4 of the budget documents.

For the global government, Mr. Minister, you claim that you will ⁇ balance. You claimed that in any case in the defense of your 2005 budget and in the budget adjustment. However, I note that the National Bank currently presupposes a deficit of 0.5%. You will find 0.5% no drama. If it happens once, then it could still be defended. What is much worse, however, is that for the year 2006, even if one takes into account a significant economic growth — the National Bank does that, it foresees a national growth of 2.4% and also the OECD foresees a significant economic growth for the year 2006 — one nevertheless will have a deficit of 1.4% on the gross domestic product. Now, however, we are beginning to talk about ⁇ large amounts, as 1.4% corresponds to a deficit of 4.5 billion euros in the 2006 budget. These are the forecasts of the National Bank, the OECD and the Planning Bureau.

All this must be stated in addition to the 2003 Annual Report of the High Council of Finance – which is the latest Annual Report published – which advised you and your Government, Mr. Minister, to seek a surplus of 0.3% on the global budget for 2005, a surplus of 0.5% for 2006 and a surplus of 0.7% for 2007. These were the opinions of the High Council of Finance in 2003.


Minister Johan Vande Lanotte

Would you also be so kindly to quote the advice in full? The Supreme Council of Finance proposed this and explicitly mentioned it: "in the assumption that a certain economic growth has not been realised." You will know that the High Council of Finance always links its opinions to economic growth forecasts. If that economic growth is not achieved, the Council will also subsequently adjust its forecasts and proposals. Therefore, it is not correct to name one number and not the other.


Carl Devlies CD&V

That is precisely the drama, Mr. Minister, that the economic growth in 2004 exceeded the forecast. For the High Council of Finance forecast for 2004 was 1.8% and economic growth for 2004 was 2.7%. In fact, you should have performed better than the advice of the Supreme Council.


Minister Johan Vande Lanotte

No, that is not true. The Supreme Council’s opinion assumed an average growth between 2.25% and 2.50%, a trend growth. This trend growth has not occurred. Every time you repeat that most recent time. If one takes the trend growth of the High Council of Finance every time and compares those figures with our results, we are much better than what one has anticipated. Be so honest to say that.


Carl Devlies CD&V

I am reading the latest annual report of the High Council of Finance. Per ⁇ a new annual report will be published in the coming months, but this is the latest annual report I know.


Minister Johan Vande Lanotte

When is it dated?


Carl Devlies CD&V

from 2003.


Minister Johan Vande Lanotte

Do you say 2003? How big was the forecast growth for 2003, 2004 and 2005? Average 2 comes so much percent! How big was it in 2003, 2004 and 2005? Not yet 2 percent.


Carl Devlies CD&V

The growth for 2004 was 1.8%, and the years before it was of the same size.


Minister Johan Vande Lanotte

How big was it in 2004 and 2005? Tell it all.


Carl Devlies CD&V

For the year 2004 the result was 2.7%.


Minister Johan Vande Lanotte

Mr. Devlies, you just said it: the High Council of Finance says that we will get so much in 2006 and so much in 2007. This is stated in the annual report. You just quoted it. What was the growth hypothesis? The first thing you said was: before 2004 there was growth. It is not about that. The High Council of Finance has set those figures for 2006 and 2007, taking into account growth in 2004 and 2005 and 2006, which today is not realistic, neither one-time nor average.


Carl Devlies CD&V

Are you talking about 2005? You are talking about 2005 and 2006. I am talking about 2004.


Minister Johan Vande Lanotte

You were talking about 2006 and 2007. Do you no longer know what you are saying? Did you just set the goals of 2006 and 2007 or not?


Carl Devlies CD&V

Yes, but...


Minister Johan Vande Lanotte

Did you mention 2006 and 2007?


Carl Devlies CD&V

Yes, but it is the latest annual report of the High Council of Finance. For the first year, growth rates may be established that are higher than the forecast or assumption of the High Council of Finance.


Minister Johan Vande Lanotte

Also for the second year?


Carl Devlies CD&V

We will see that.


Minister Johan Vande Lanotte

Johan Vande Lanotte: But finally. You are just not honest in that.


Carl Devlies CD&V

The year 2005 is still running.


Minister Johan Vande Lanotte

If the hypothesis of the High Council of Finance for 2005 is not met, Mr. Devlies, and we only get 1%, can we adjust our budget goals to that average? Would you like to answer that?


Carl Devlies CD&V

I am very pleased that you ask me this question. If you ask me that question, I will give you the answer. Indeed, if economic growth in the year 2005 does not meet the assumptions of the High Council of Finance, an adjustment must be made to the long-term calculations.

This also applies to the year 2004 when economic growth was higher than the assumptions of the High Council of Finance.


Minister Johan Vande Lanotte

The result is higher than what the Supreme Council has requested.


Carl Devlies CD&V

It was indeed more than anticipated.


Minister Johan Vande Lanotte

The result was more than expected.


Carl Devlies CD&V

This means that you can also adjust your objectives upwards.


Minister Johan Vande Lanotte

And if 2006 is bad, downward in your vision?


Carl Devlies CD&V

A second advice given by the High Council of Finance is to maintain the primary balance at a constant level of 5.3%. However, we note that this primary balance continues to decline further.

Finally, about the debt rate of 87.3% for the year 2007, I will say a little bit later.

Mr. Minister, where are we today? You talked about board tables that would be published monthly. I have asked you a question on this in the committee. You said later that this should not be taken too literally, that the board tables would be there in May and September. I asked you this question in May. You could not immediately bind conclusions to it and suggested that they would come in the third week of June.

The third week of June is over. You mentioned the date of June 17. Where are we standing? What has been the most recent evolution?

To my surprise, you postponed the further budget adjustment to July, while it was originally scheduled for the third week of June. You may want to say something about the conclusions that can be drawn from the board tables you collected in May.

With the documents presented, I can specifically say that we have conducted extensive discussions in the committee and that you have responded in detail to the various questions that were asked. I would like to briefly touch on a few points, including the problem of increasing debt. There is a significant increase in debt of 7.2 billion euros for the year 2005. This means that the total debt will be raised to 270 billion euros, coming from 263 billion euros. This represents an increase of 2.6% of the total debt.


Minister Johan Vande Lanotte

Just for information. You know that when we have a balanced budget and we take over the NMBS debt, we have an increase in debt. You say you care that the debt is rising. Does this mean that we should either have a surplus of about 2% - then the debt would not have increased - or that we should not take over the debt of the NBMS?

You say we will have a balance, but you know that the debt increases when we take over the debt of the NMBS.

You find it regrettable. I also find it regrettable. The remedy is either not to take over the debt — that would be an option — or to seek a surplus of more than 2% so that the debt will also not increase. What do your words mean? We must be consistent.


Carl Devlies CD&V

I have only concluded that in 2005 there will be an increase of €7.2 billion in debt, of which indeed the majority comes from the acquisition of the debts of the NMBS, namely more than €5 billion. However, one section also covers other elements of the financial year 2005. I just note that the increase in debt in absolute numbers is there. That corresponds to an increase of 2.6%.

When drawing up the budget, you initially stated that the increase would have little effect on the debt reduction, which would continue as a percentage of the gross domestic product. However, I conclude that with the deterioration of the economic situation and the slowing growth of the gross domestic product, it is most likely that we will have to see the year 2005 as a rope year, in which not only the debt in absolute figures has risen sharply. Also, relatively speaking, Belgium will face a trend break in relation to gross domestic product, with the debt in percentage increasing again. The year 2005 threatens to become a hassle year in this area. I would like to point out that.

The results of the 2005 budget will also be important in this area. If the result of the 2005 budget is negative, it will naturally result in the debt increasing even stronger than the €7.2 billion, which is anticipated in the budget documents today.

I would also like to refer to the table on page 20, which relates to the trade balance figures. We have had some discussion on this in the committee. Clearly, net export figures have evolved negatively since 2003. It was many years ago that this was still the case. The balance of the increase in exports of goods and services and of imports is negative. In 2005 this will be the third year in a row.

If we combine that negative balance with the numbers of employment, which are truly alarming and which we find on page 45 and following, then we can speak of a ⁇ bad climate. This will also result in poor budget results.

Then I would like to make a comment on how these budget documents are drawn up. You always refer to the past and say that this was the case before. However, I have a problem with the fact that these documents are not clearly formulated, in the sense that there is no clear distinction between what the federal government is and what the global government is. One finds whole chapters that unquestionably switch from the federal to the global government without giving any explanation. For example, if one looks at the first page of these budget documents, one finds that on the left page there is a table of figures relating to the federal level, merely at the federal level, while on the other page there is an explanation which only relates to the global government without giving any clarification. I therefore consider it important that the Parliament should have an understanding of the actual situation of the federal budget, of the actual situation of social security and that, together with the data of the Communities and Regions and of the municipalities, the global government should be proposed. However, one must clearly demonstrate what the evolution of the federal government is.

Finally, Mr. Minister, you are doing another Silver Fund operation. Following these budget adjustments, EUR 306 million will be allocated to the Silver Fund. You justify that this should be useful for the construction of a reserve to guarantee the financing of the increase in pension expenditure due to the ageing of the population. We have already had a discussion on this topic several times. It is clear that the Silver Fund is an accounting fiction and I therefore regret the way you argue that, as if this Silver Fund would really be a reserve from which pensions can be paid. This is a real misconception of things, which is a deception of the citizen.

Then I have a question for you regarding the Silver Fund. You ask questions and I can also ask questions. That is a question that you have not answered. Most of the questions I asked in the committee have been answered by you. However, one question you did not answer, namely the question concerning the bill you approved in the Council of Ministers on 15 February 2005 in which you provide that from the year 2007 the Silver Fund will be financed with structural surpluses. This has been approved in the Council of Ministers but, colleagues of the Committee on Finance, I do not believe that you have already seen that bill in the documents submitted to the committee.

Now I ask the Minister when this bill will be submitted to the committee and to the Parliament for approval.

So far, a few observations regarding the first budget adjustment of 2005. Of course, the circumstances are of such nature that we will have to wait for the initiatives that the government will apparently take in the month of July and the new initiatives that it will have to take from October.


Luk Van Biesen Open Vld

Mr. Speaker, Mr. Deputy Prime Minister, colleagues, more than in the past years, budgetary control is situated this year in a climate of uncertainty and great fluctuations. Following the completion of budgetary control at the end of April, both the OECD and the Planning Office concluded in their updated economic outlook that the government will need to make additional budgetary efforts to balance the budget for this and next year.

According to both institutions, a possible deterioration of the budget balance is mainly due to a lower economic growth. Conjuncture indicators have also evolved unfavorably since then. Both consumer and producer confidence has gained a fixed threshold in recent months.

In addition, we have also been able to note a number of hopeful signals over the past few months. For example, VAT receipts and advance payments of taxes increased significantly in March compared to the first months of 2005. According to the Minister of Finance, the government also received 685,5 million euros or 6.7% more tax money than expected in April. This would provide a budget margin of approximately EUR 200 million compared to the most recent outlook. It remains to be seen how that income will evolve in the coming months.

Contrary to expectations, next year’s municipal council elections will only have a limited effect on the financial situation of the Belgian municipalities. In a recent overview of the municipal finances, Dexia-Bank estimates that investments in the year of the ballot will only increase by a tenth, while that is normally around 20%.

Finally, the number of start-ups in our country has increased and the number of bankruptcies has decreased.

The discussion in the committee has therefore repeatedly raised the question of whether the proposed adjustments in the fiscal control for 2005 are sufficient. Is the budget control not overlooked, taking into account the most recent forecasts?

Now, colleagues, at the same time as the first adjustments to the 2005 budget are being made in the plenary session of the Chamber, the Government will focus on an additional evaluation of the various parameters and objectives and will, where necessary, provide the necessary adjustments.

The VLD welcomes this initiative of new and permanent checks. It illustrates the government’s determination and ambition to ⁇ budget balance this year for the sixth time in a row.

Also for our group, a balanced budget for this and next year remains a necessary prerequisite to maintain the confidence of consumers and producers. The build-up of surpluses from 2007, in accordance with the stability programme, remains our starting point. These surpluses are necessary to resolutely continue debt reduction. Budget deficits are irresponsible to the VLD. The next active generation should and cannot be seeded with a mountain of debt, on the one hand, and the financing of aging, on the other. The budget surplus puts a mortgage for future generations.

In order to strengthen economic growth, the tax reform should also be avoided. Next year, the final phase of the personal tax reform will fully take effect. The tax reduction then turns at cross-speed. Especially two earners will have to pay less taxes due to the full decumulation of all income. The tax reduction must be carried out unabated and must also be able to take place at the right time. This means that the tax reform should be accounted for in the corporate advance as soon as possible. The path of inquisition is therefore abandoned.

Many tax returns in the personal tax for the financial year 2005 that are drawn up today already show a clear reduction in the tax to be paid. The Professional Institute of Accredited Accountants and Fiscalists also ⁇ last week that many citizens will actually feel the impact of the tax reform through a significant surcharge. This is of course good news for our citizens. We reiterate our call that it is the task of the government to raise the right taxes at the right time and not to ask the citizens for an uninterested loan without obligation. In view of this, it urges to revise the method of calculating the corporate premium.

According to various national and international reports, our country experienced higher economic growth than our neighbors, thanks to these tax cuts. If we want to keep this advantage, then we should ⁇ not delay the tax reform.

The VLD also encourages the government’s decision to carefully analyze the further evolution of public finances through dashboards. The Government made the right decision to monitor the progress of revenue and expenditure on a permanent basis, taking into account the uncertain growth outlook, on the one hand, and the timing of the measures already taken, on the other. If the data indicate that the budgetary objectives would be compromised, the necessary adjustments should be made.

Let us take a look back on the results of the first fiscal control for 2005. First, the fiscal control 2005 confirms the fiscal balance of 2004, the fifth consecutive budget under Verhofstadt, which was closed with a balance or a small surplus with positive effects on economic growth.

The slight surplus of 0.1% can, by the way, be best seen among the claim salaries of the other eurozone countries. Only two other eurozone countries, namely Finland and Ireland, can present a positive balance for 2004. The euro area’s average deficit amounted to 2.7% of gross domestic product in 2004. Several Member States could not prevent their balance of claims from approaching the 3 % standard, while other countries have even exceeded that standard.

In an assessment of the Belgian Stability Programme 2005-2008, both the European Commission and the ECOFIN Council therefore find that the Belgian government has built up a high budgetary credibility after five budgets in balance or with a surplus.

The budgetary balance also gained a more structural character in 2004. The impact of the one-off measures was reduced from 1.5% of GDP in 2003 to 0.7% in 2004. This trend should continue in the coming years.

The healthy Belgian public finances are throwing out their economic fruits. After three consecutive years of low growth, growth in 2004 was as high as 2.9%. This is significantly higher than in the surrounding countries.

Both the National Bank and the IMF attribute this favorable growth performance at least in part to the successful recovery of public finances in recent years. The growing range of budget break-off reports, coupled with a sharp decline in debt rates and a steady decline in the tax burden on labor, support the confidence of families and ⁇ . This leads to higher consumption and investment.

Secondly, debt reduction continued unimpeded in 2004 to better cope with the effects of ageing. In 2004, the debt rate dropped by as much as 4.5 percentage points, thus dropping below 100% of GDP for the first time in almost twenty-five years. Despite the large-scale debt acquisition by the NMBS, the debt rate is hoped to be further reduced in 2005 to 94.6%. According to the latest stability program, the Belgian debt rate will further converge to the European average in the coming years, which, by the way, will increase due to the accumulation of deficits in the euro area.

Third, the budget control shows that the government has taken the necessary precautions. Taking into account the uncertain conjunctual outlook, the government has not only revised its growth limit downwards, it has also established a conjunctual buffer of €200 million to be able to immediately address short-term collisions.

More importantly, as already mentioned, the Government has for the first time institutionalized a periodic review of revenue and expenditure using dashboards to make upgrades if necessary.

Fourth, the reduction of the fiscal and para-fiscal pressure on labour is beginning to bear more fruit on our labour market. In 2005, the tax and parafiscal burden on labour will decrease by 0.4% of GDP.

Together with the achievements in 2004, this represents a decrease of 1 percentage point over two years. This policy has enabled the number of jobs, after the quasi-stabilization in 2003, to increase back in 2004 by approximately 30,000 units. In 2005, the increase in employment will also begin to result in a decrease in unemployment.


President Herman De Croo

Mr. Van Biesen, Mr. De Crem wants to intervene.


Pieter De Crem CD&V

I don’t know if our dear colleague believes what he says. Per ⁇ this is a report that is useful for a meeting of the VLD party bureau to boost the mood a little, but to tell the story that the results of successive reforms would have led to an increase in employment or reduced unemployment seems to me, frankly, slightly exaggerated.


Luk Van Biesen Open Vld

I know that you find it ⁇ difficult, Mr. De Crem, to face the truth from the opposition. It is not easy for you to refute the correct numbers. Reflect the numbers and then I want to start the discussion with you. You limit yourself to vague statements, such as “it’s going worse” or “there are more unemployed”. Everyone knows that jobs are being created and that this is the merit of this government.


Pieter De Crem CD&V

I only note that unemployment is increasing, that youth unemployment and that of full-time equivalents in unemployment has increased by almost 30%. I think you have a sudden attack of deafness or blindness. I hope for you that it is temporary and that you open your eyes in time to face the reality. Read a newspaper, for example, this morning.


Luk Van Biesen Open Vld

I find it a little strange that the group leader of a yet renowned political group is based on newspaper clips. You must face the right figures and then you can clearly see that the employment rate will increase by about 0.3% to 62.1%. It is important that we can increase the activation rate.


Pieter De Crem CD&V

I thank colleague Van Biesen for the friendly attention to my group, but I can tell him that I am immune to the flies.


Carl Devlies CD&V

For example, I can refer to page 23 of the general explanation to the budget, where the figures on employment for 2004 are listed. An increase of a total of 29,000 units for the year 2004 is cited while there was a slight decrease in the year 2003. This limited increase in employment rates — primarily in the subsidised sector — is insufficient to capture the growth of the population at working age, which unfortunately continues to increase the overall unemployment rates.


Luk Van Biesen Open Vld

Mr. Devlies, there is a fundamental difference between percentages and the number of jobs that have increased as such. I suspect that no one in this hemisphere can doubt that the number of jobs has increased. For the VLD, the reduction of the tax pressure on labour is only one but essential source for encouraging employment. Now that the end-to-end debate has finally been cut through, our group is pleased to see that the government is accelerating the implementation of its main priority, in this case the promotion of employment in our country. At the same time, we realize that there is still a long way to go. We would like to call on all stakeholders, employers and employees, to take their responsibilities and to find solutions together. The completion of the end-to-end debate and the socio-economic dossiers undertaken by this purple government is not only relevant to the government itself but is determining for the realization of economic growth.

Fifth, in 2005, the tax burden was reduced by EUR 1.25 billion. The multi-annual plan for the reform of the personal tax was implemented without shrinkage and will reach cross-speed in 2005. That this policy of lower taxes coupled with healthy budgets has not missed its effect on the growth of our economy, I just mentioned.

Finally, this budgetary control also dismantled the often cultivated myth that the states and especially the state since having a new coalition would systematically deliver more budgetary efforts than the federal government. The federal government degraded its deficit of -1,5% in 1999 with 1.3% to — 0.2% degraded in 2004. The surplus of the Communities and Regions and local authorities was 0.4% in 1999 and 0.3% in 2004. Why federal status quo? Entity 1 — repeatedly pointed out in the committees — has made greater budgetary efforts than Entity 2. This is clearly shown by the figures. So stick to the numbers and acknowledge the importance of the efforts of the federal government.

In fact, the budgetary control shows that the composition of the budgetary balance has changed. The claim balance of the Regions and Communities to be pursued has been reduced from 0.2% to 0.1% despite the transfers of the federal government to the other governments has increased sharply by 0.5 billion euros compared to the budget formulation. On the other hand, the balance of the federal government to be sought after the audit is more ambitious than in the formulation of the budget. The Inter-Ministerial Conference on Budget also confirmed that the counties will need to make a smaller budgetary effort this and next year in order to ⁇ the objectives of the stability programme for joint governance. Moreover, it is necessary to have the courage to solve the emerging structural problem. The current financing rule rightly gives more resources to the Communities and Regions. This will put the federal budget under further pressure. Political leaders must have the courage to investigate this. In my view, the solution lies in further federalization of this country: more powers for Communities should be the guiding motive. More powers and more resources, of course. Any fiscal analyst will agree with me that the sanitation of the public finances coincides primarily with the momentum of Belgium’s federalization of the public finances. Belgian government, do not tame, activate the conversations from Community to Community and come to a more federal Belgium.

Mr. Deputy Prime Minister, there is also a problem with the best and most useful accounting for the public sector. The 2003 fiscal reform stipulated the introduction of analytical or double accounting.

Repeated questions in the committee and in the subcommittee Rekenhof have shown that you do not like the introduction of double accounting. We have been living in an impasse for a long time. Their

Mr. Minister, after a fundamental review of the state of affairs by the Court of Auditors on 21 April last year, you were unanimously attributed by the subcommittee. The subcommittee is unanimously of the view that the current situation in which the entry into force of a budgetary reform approved by Parliament on the proposal of the Government is repeatedly postponed cannot continue. It therefore insists that the Government should submit a draft law to the House of People’s Representatives with the amendments it proposes to the laws of 16 and 22 May.

In other words, we ask for clarity in this file. That the current accounting needs to be adjusted leaves no doubt. The sequence of debts and the claim, the value of the patrimony are essential data for good governance. In this sense, I ask you as the Chairman of the Subcommittee of the Court of Auditors and as a member of Parliament for clarity. Mr. Vande Lanotte, you owe this clarity urgently to this Chamber.

Colleagues, in conclusion, we would like to express our support to a government that wants to again present a minimum balanced budget in 2005. The additional budget control, which is now fully underway, shows the determination to take it for the sixth time in a row, despite the less positive outlook. Do not hesitate to make the right decisions. The steadfastness of this government is an important support for economic growth.


Minister Johan Vande Lanotte

I just want to make it clear to those who spoke — Mr. Wathelet is no longer there — that the thought only that you would rejoice over the fact that the government is going to file a deficit, you probably rejoice, but I will have to disappoint you very much. We will try again to reach a balance, as we have done in the past, and every time the economy went worse than expected, we will still try to reach our goals. Over the past few years, whenever the economy has done substantially worse than expected, we have nevertheless achieved the result. Their

I have made some comments on this and I will stay with it. I compared it to the flu yesterday. Flu is not a disaster for humans. However, we are committed to not getting the flu and remain so healthy. But it means that it is not a disaster. The first thing I’ve said is that a lot of posts about our budget very often make me think that people here live on a different planet than the others. The Belgian budget was handled by the European Commission. The Belgian budget was discussed for ten seconds. The Commission said there is no problem. The French budget was then discussed and it took three hours, to say that. We are going to regain a balance and confirm what the committee has literally said, namely that on budget the Belgian government has proven that it was credible. These are the literal words of the European Commission. I can hardly say it better, of course.


Servais Verherstraeten CD&V

I am not a budget specialist. I heard in an intention statement from the minister that he is trying to seek a balance, where there was a speech from colleague Van Biesen who actually asked and demanded a balance.


Minister Johan Vande Lanotte

He said: “Do not try, it will not succeed. Sometimes it happened once, now not. The agreement in the government is that there is a balance. This is never often questioned. If you read the article of The Standard, you would see that it is able to do it twice. Their

There is no difference between what Mr Van Biesen says – we want a balance – and what the government says – we want a balance. All parties of the majority are in favor of achieving a balance. I too . The only thing I will always deny you is the possibility of panic that you are constantly trying to sow. I will constantly contradict this, without optimism. I wish never to confirm all this pessimistic, unrealistic, pessimistic atmosphere that you exhibit, because, first, it is not correct. Their

Second, this also affects the negative consumer confidence. In this way, you also counter the growth and employment. I will never go into it and will continue to say that even if there should be a shortage, this is not a catastrophe. That is true, in the facts. As Mr. Devlies said, “If that happens a year, it is not a disaster.” It is also so. Nevertheless, we will again deliver a balanced budget this year, as we have agreed, but I just don’t go into that catastrophic thinking.

In those five years, I have never done wishful thinking. You have never heard of me being euphoric about anything. I never did that. However, the excessively negative noises that are constantly being made about it are now responsible for a reduction in trust and consumer confidence. One should not do that. It helps no one. That doesn’t help you, even though politics can be just as interesting.


Servais Verherstraeten CD&V

I know that there is a difficulty in the womb of this majority when it is necessary to distinguish between performance commitments and effort commitments.


Minister Johan Vande Lanotte

What has been the result of the last five years? Have you, with your party, ever been able to submit a balanced budget, Mr. Verherstraeten? and never. That is a result. This is not a means, it is a result.


Servais Verherstraeten CD&V

You know how we have achieved these results. I thought you were in the previous governments too. You know what efforts and what huge leaps, Mr. Deputy Prime Minister...


Minister Johan Vande Lanotte

[...] It is incredible!


Servais Verherstraeten CD&V

... ... Then it happened. On the other hand, in the last fiscal years there have been enormous facilities that you have not been able to fully use.


Minister Johan Vande Lanotte

The [...]


Servais Verherstraeten CD&V

Mr. Deputy Prime Minister, I think you forget a piece of truth, but I have understood it. If something goes wrong in this country, it is up to the opposition, and if something goes well in this country, it is up to the majority. That is your conclusion.

I come to the second part of my question. I have heard the remarks of Mr. Van Biesen. I was absent from the subcommittee meeting. There is therefore apparently a report from the subcommittee and a request from the subcommittee to the government to submit a draft on accounting in this working year.


President Herman De Croo

The Minister will answer later. We are now working on the replies.

Mr Goyvaerts asked for the floor.


Minister Johan Vande Lanotte

( ... ...


President Herman De Croo

Mr. Minister, you will be able to answer later.


Hagen Goyvaerts VB

Mr. Speaker, I would like to return to the Minister’s complaint against the opposition that we cooperate with the negative atmosphere associated with consumer confidence. In the past few months, we have received a whole series of analyses from the Plan Bureau, the OECD, the Institute for National Accounts and until yesterday the VBO. I suggest that you then ask those institutions not to do any more analyses or publish any more figures, because they are of course part of some data.


Minister Johan Vande Lanotte

(...) What was the result? Was there a deficit? and no.


President Herman De Croo

Mr Tommelein, at this point.


Bart Tommelein Open Vld

I find it annoying to my colleagues that, if the institutions they call tell good things, they always question that. If there is a report that the burden reduction in 2004 led to higher economic growth, they are laughing at it. This year, when a number of other figures come out, it is suddenly the greatest truth that can exist. I have my doubts about the reactions they give to it.


President Herman De Croo

Mr. Devlies, you also have the word on this point. Then I return to Mr. Goyvaerts.


Carl Devlies CD&V

I would suggest to the Minister of Budget that he also look at something in his own belly, before pointing to the opposition in an easy way. I refer to the way the government deals with a lot of things. Let’s just think of the tax on the ecotax, to give an example, which will be raised by 50 percent in January. The government then determines that consumers cross the border to make their purchases abroad, and then reduces that tax by 50 percent in the program law and so on. There are dozens of examples to be given. This is not a way to conduct politics.

I have another question. I think the question of Mr. Verherstraeten is important. The Chairman of the Subcommittee of the Court of Audit also pointed out this.

I have another question regarding the amendment of the Law on the Silver Fund, which you approved in the Council of Ministers on 25 February. When will you present this to Parliament?


Minister Johan Vande Lanotte

You know I have a certain view on this. I have already talked about it. You know that we are also working on a fairly large study assignment, which is about 25 million euros, for all kinds of adjustments. This working group is working on it. We are adjusting that in accounting, but without mythical belief in one or the other solution. In short, we need to have an accounting that is adapted and that is good. I will always oppose something that is merely a copy of something that happens differently in the private sector, because it would be better there. That’s what happened in the past, resulting in a piece of irrelevance.

If one modernizes the accounting, there will be no problem, but it must be operable. The whole discussion about depreciation, for example, and the whole discussion about inventory too, are irrelevant. They are hardly working. I’m not going to allow that because it means that masses of officials are being mobilized for years to make inventories with fictitious depreciations that have not been used. This is something that everyone in the expert group agrees on. When it comes to having better insight, more computerization, creating more predictability, being able to perform more cost analysis, and checking whether something that has been announced is effectively happening, then that is not a problem for me. Otherwise we would not invest 25 million in all that informatization and in the Knowledge Centre. However, it must be done rationally. I note that most regions also begin to think in that direction and say, "Yes, we need to be careful."

With a pragmatic approach, I have no problem. I have no belief in this, except in one thing in particular that we do not - because something is happening in the private sector - should do the same in the public sector, where there is another accounting. I do not believe in that. It must be useful, that’s all.

I will see what is written about this in the subcommittee. We will discuss this. Again, I do not believe in that. I guess some people believe that.

But I’m not going to mobilize 500 or 600 officials for 3 years to start with such an accounting. I’m not going to do that, hey! I will not do that! We have done this once in the municipalities. It is enough!


Servais Verherstraeten CD&V

Mr. Minister, can I briefly replicate? We had this discussion together in the committee. Our views are and have been different. Only, according to what I hear today, and what was new to me, one in the subcommittee — I assume that it is a vote formed by the colleagues of the majority — apparently has a different vision than you as Minister of Budget. I think this is politically relevant.


Minister Johan Vande Lanotte

I have never been invited to the subcommittee.


Luk Van Biesen Open Vld

I would like to clarify this, because there should be no discussion about it. At the time of the meeting of the subcommittee, at which delegates from your ministry and your cabinet were present, at the end of April 2005, you were in the budget conclusion and you could therefore not be present at the time when the budget we discuss today was being dealt with. Well, I quote the conclusion drawn unanimously by the MEPs at that meeting across all political groups: “The Subcommittee is unanimously of the view that the current situation, in which the entry into force of a budget reform approved by Parliament on a proposal from the Government is repeatedly postponed, cannot continue.”

We have had a similar discussion during the discussion of the 2004 Program Law. We then told the minister — you will remember the discussion — that we would not telkenmale re-approve a provision in the program law, which says that we will not apply an approved law.

Therefore, the subcommittee instructed the Minister to submit as soon as possible a draft law that would introduce the proposed amendments to the laws of 16 and 22 May 2003. The letter was unanimously signed and sent to the Minister. We hope to get an answer to this as soon as possible and thus a clear adaptation of the laws of 16 and 22 May 2003.

This is what was decided in the subcommittee. We have also requested that the changes be implemented in the current parliamentary period, in the hope that they can happen as soon as possible. After all, it is important enough to know which accounting for the public sector should be kept.


Minister Johan Vande Lanotte

I totally agree with the conclusion. I have no problem with it. I do not ask to postpone the adjustment every time, but that things be adjusted in a pragmatic way. With the conclusion, however, I have no problem, at all.

For the Silver Fund, the opinion of the State Council was received during the month of May 2005. We are now working on the design adjustments; there are not so many. Once the budgetary control is over – people now have other things to do – we will submit the draft to Parliament. We do not have to present it to the government first. The draft will therefore likely be submitted in early July 2005.