Flemish Member of Parliament and Alderman for Finance in Bruges Mercedes Van Volcem (Open VLD) proposes to stop the rapid increase in wage costs by intervening in the mechanism of automatic wage indexation. “Doing nothing will lead to a spiral of price increases and recession, which will lead to collective impoverishment,” she says.
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Source: BELGIAN
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According to Van Volcem, the indexation should be net and not gross. She proposes to index only on a first bracket of 2,500 or 3,500 euros gross instead of on the full salary. “After all, not all costs are subject to inflation,” she explains. “For example, the housing cost can be fixed: the loan is not indexed.”
“It’s not a nice idea, but if we don’t want to end up in a recession, we have to do something. We must stop the inflation spiral. A solution has to be found,” says Van Volcem. “Tough times require courageous and decisive decisions.”
Van Volcem also points out that the higher costs also weigh on city finances. “For Bruges, for example, the indexation means 6 million euros on an annual basis. In a multi-year budget, that is 18 million euros. The energy costs provide an additional 3 million euros. Only part of that is recovered in the personal income tax.”
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