Thursday , April 22 2021

The parties make many promises, but often forget to fund them



The air from nothing, it's a colossal job that the office has provided the plan. Which of the parties quantifies, up to five electoral priorities. How much does it cost, of course, but also: what is their impact on growth, household incomes, debt, labor costs or CO2 emissions? It's good to know: for a moment, many beautiful promises are not funded. Who raises the question of their credibility.

And that's it, that's it. Figures are out. The federal planning bureau handed over a month before a tentative poll on May 26th, which resulted in a quantification of election promises that the parties had submitted – no more than five training priorities. Delicate exercise and first, which will undoubtedly change over time; The plan already calls for the process of evaluating the law to begin as soon as possible.

But we are not there yet. In the meantime, let's dive into this data, available on the website www.dc2019.be. And try to remove a global image, in some lessons.

1. Compare what is comparable

Warning. The application of harsh, party comparability to medium-term macroeconomic consequences can be wrong. One example: according to parties, by 2024, Belgian debt could fall by 1.11 GDP or increase by 6.03 points – and again, you will avoid 8.7 points on Vlaams Belang.

What has to compare is what is comparable. Some parties return a menu instead of "easy". As PTB, "upset" that the Planning Bureau declare itself incapable of assessing its "millionaire tax". The remaining measures cost 190 million and make 325, leaving a positive balance of 135 million euros. Poor.

At the other end of the spectrum, NCM or CHALLENGE have the bulk of their tax reform in the future, namely raising (up to 13,500 euros for blue and 13,670 euros for training for amaranth) from a quota without taxes. One beam, which weighs 8.8 billion euros for some, and 10.5 billion for others.

You will understand: the graph above is taken with strong tweezers. Although it is spicy to notice this the right is significantly more likely than the left to dig debt – or how to make a cliché with a hair back. It should also be noted that this is the far right hand holding the palm, and Vlaams Belang bows, by 2024, the debt of 8.7 points.

2. Tax reform is usually expensive. A lot.

Inappropriate: touching taxes usually involves major changes in spending and revenue. Let's compare what is already a little bit more, in the following chart, we only retained the parties that submitted all or part of the tax reform of the personal income tax. With the exception of the PS, which only supplies roads to the plan, which include revenues (with, at the head, globalization of some income), but there is no expense, while the CBP program shows that it will also well meet the tax exempt quota.

Here we are confronted with one of the boundaries of the exercise. How will all of these tax reforms be financed? In some parties, this is an absolute mystery. As in the case of DéFI, where a blow to a fraction of 10.5 billion is independent. The same fight (to 8.8 billion euros) of MR. What is completely funny, the Liberals did not stop, in recent weeks, to blame the Socialists for "shaving without money"in other words, to promise miracles without worrying about the law that follows – a note that is the same as for PP, note well.

Add 491 million real estate "gifts" and the question is: where is the MP going to find $ 9.3 billion in progress? The supreme ambiguity reigns, which explains that by 2024, the Plan estimates that liberal projects are plagued by debt to 4.92 points of GDP, while the budgetary balance is deteriorating from 1.89 points, all in comparison to the baseline scenario of the plan, on the basis to his latest economic forecasts and to work with unchanged politics.

Of course, the Liberals say, they will take steps to fund everything, as (partially) for the tax shift. But these will have repercussions, potentially negative, purchasing power or growth, which so far exists with the evaluation of the plan. Submit a coherent set, you will give stronger results.

By contrast, a series of other parties have already published a list of compensatory measures, even sometimes partially. In the chapter: globalization of revenues (Ecolo and sp.a) and planning of the company's car company (Ecolo, Groen and sp.a).

3. Who uses the "crime" tax?

This is the other classic effect of the tax reform: he packs and scratches others. That's it: there are winners and losers. It is not interesting to analyze who makes the greatest benefit from redesigning the PPI, which he imagines.

The risk of a scheme pattern, say there are three schools.

• The first is primarily aimed at rewarding workers and pensioners, and at the same time targeting upper and middle classess (income from 3d tenth). There is MR, Open Vld and … sp.a. Not to mention N-VA, even if they are more likely to see higher incomes and leave pensioners. PP is undoubtedly the most extreme in this issue, his plans to reduce the disposable income of the top four deciles, and favoring the highest incomes.

The latter is pretty close to the first onewith this extra touch: also pays attention to income from the first decade – that is, the lowest 10%. This is the style cdH and CHALLENGE.

The third, of course, is fragmented. Ecological school, grouping Ecolo and Groen, clearly stands for the lowest income, the first decade is most pronounced. Remaining that the highest lost a bit – we assume that it is not related to the disappearance of the tax system of the company's car. If Ecolo focuses on social benefits, Groen adds employees and civil servants, leaving little independent and retiree.

4. Let's share some small "surprises"

His name is Hermes and he's been running lately. Normally, because it is the "form" used by the Planning Bureau to assess the short and medium-term macroeconomic effect of all the priorities presented by the parties, which is compared with the reference model, unchanged policy.

With sometimes some unexpected results, which will not always do the business of the affected formations. You have invented a little vaguely.

Little surprise, on the side of Belgian GDP growth. By the end of the next parliamentary term, 2024, the H-VA cocktail is the only one that leads to a slight decline in growth, compared with the reference scenario used by the Plan. Oh, that's not much: only 0.13% reduction in GDP. But it's ridiculous: to tell the truth, we did not expect it to fall on Bart De Vever.

For N-VA, it also stumbles on the evolution of disposable income, which varies in very bright red (-0.09%). In doing so, N-VA joins the ranks Ecolo and Groen which are in the same case (ie -1.31% and -0.14%). Keep in mind that environmentalists are also scratching, even if consumption consumption for fifteen years takes consumer prices up (in the company, this time, CD & V).

Finally, the job marketIt should be noted that Ecolo (+ 0,43%) and PS (+ 0,76%) slightly improve labor costs, with little impact on exports. Finally, Ecolo is the only party that has reduced the employment rate by only 0.04 points.

We insist: these "anomalies" are clearly anecdotebecause their proportions are small, if not close to insignificance.

5. Here we are talking again about the globalization of revenues

It appears in the ranking of many programs, and three parties submitted it to the plan: Ecolo, PS and sp.a. Globalization of income, wanting that one euro of income is taxed in the same way as personal income tax, regardless of its origin, to talk about her again.

With PS, with no real estate revenue or savings account, it will bring 1.75 billion dollars. The same recipe for Ecolo. And when it comes to full steam, SA, with a strong expansion of the tax base, globalization brings 5.9 billion euros.

6. Of course, the end of the company's cars is on the agenda

This is no surprise. Removing this more controversial tax benefit has made its nest in some electoral programs. Ecolo, Groen and Sp.a have submitted it to the plan. Revenues range between 2.4 billion and 3 billion euros, with Groen incorporating an additional mechanism for mobility mobility.

7. Like the time limit for unemployment benefits

N-VA never hiding it: it intends to limit unemployment benefits in time; the ceiling will be two years. From what to report $ 1.5 billion, estimated the Bureau for the plan.

It should be noted that the Flemish liberals have also submitted this path to the evaluation exercise. Except that Open Vld removed it at the last minute. It remains to be seen why. In any case, he received an answer.

8. The fight against fraud, it works every time

This is a classic budget conclave. Even the biggest string. In order to make the bills good, the fight against fraud – once fiscal, sometimes social – is often called a rescue.

Well, now we find it in this encryption exercise. The palm is undoubtedly back to cdH, which charges $ 2.85 billion in personal income tax. This is more than an increase in the quota for tax exemption up to 10,000 euros. It's beautiful. Add to that 1.4 billion from VAT fraud, and another 750 million from profit tax. As many amounts as the Plan continues, but barely valid.

Go, cdH is not the only one who has high hopes in the fight against fraud. Ecole is closely monitored, with 2.4 billion euros.

9. Kiwi for the road

What are the figures published this Friday from the plan? That's about 325 million savings per year. The rest is likely to look for the side of the decline in the health index (-0.41 points in cruising speed).

10. Methodology

What is it, and how do you read the results?

The Parties have submitted to the Planned Office five priorities, which can be divided into several measures themselves.

Therefore attention: the work done by the Bureau of the plan is partial. Already, because the parties will do tomorrow is not necessary in their program (coward jump to the index and postponement of the legal retirement age). Then, and most importantly, because only a small part of the programs had just been passed on to the mill plan. As a result, macroeconomic projections take into account only the measures that are being submitted, and not all others, which are more numerous. This is an obvious limit of exercise in the current form.

That's not all. Of the measures put in place, some of them could not be quantified by the Plan, as they did not have a reliable model for carrying out the simulations. This is the case, in particular, of taxation of happiness. Of course, at the Planning Bureau, we recognize that it is not impossible to make the approaching big grain closer. Except that's exactly the idea behind this estimate: to avoid a great shadow. At the moment, it is not possible to reach the end of the result of such a tax. This is the case with some reducing public spending. PP proposed nearly 23 billion euros, but went empty-handed.

Some others can hardly confirm and have more pledges for the plan. Like the fight against fraud. The plan continues, without confirming the amounts which are glued to it (hence the absence of a small green "V" at the place of the planned office, a small symbol that is very important, a promise that never obliges those who decide to believe).

It is important to know: The results show the gap that party political projects are expanding with the baseline scenario used by the Plan (usually by 2024, and at cruising speed). It is based on its latest economic forecasts and, of course, is politically unchanged.

Oh yeah, this again. Only the thirteen parties represented in the Chamber participated in this evaluation. In our presentation, we mostly left Vlaams Bell on the side, a sandbox for a plain cordon.


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