The SERV estimates the budget deficit by 2024 to be larger than the Flemish government itself, if policy remains unchanged, according to their annual study. By 2021, that is estimated at 5 billion euros, which is 291 million euros better than in the government’s adjusted budget. The slightly better result is due to the economic recovery. “The recovery seems to be enhanced by the roll-out of the vaccination campaign and the support policies of the various governments,” said Ann Vermorgen, chair of the SERV.
But after 2021 it will go downhill. The problem is that public finances do not follow the recovery enough, so the government is not getting enough benefit from the recovery of the economy. If no new policy is implemented, the SERV will see the government debt increase from 25.7 billion euros in 2020 to 34.1 billion euros in 2021. In 2024, the debt will grow to 47.8 billion euros. That is more than 30 percent above the debt threshold of 65 percent that the government has imposed on itself. “To narrow the gap between income and expenditure, the government should focus on initiatives to control expenditure, but we believe that initiatives around revenue can also be important,” says Ann Vermorgen.
In a response, Flemish Minister of Finance Matthias Diependaele (N-VA) says that new taxes can in any case not be an issue for him. “We already live in one of the countries with the highest tax burden, so that would not be the right choice, not even for our economic growth.”
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