Economic growth predictions for 2017 have been revised down from 1.5% to 1.2%. According to the Federal Planning Bureau, the lower than expected economic growth is a result of the brexit. Lower growth means less income from taxation.
According to predictions, income from taxation will be 900 million euro lower than had initially been predicted. One of the reasons for this is that the Federal Government appears to have overestimated the extra income it would gain from the raising the level of VAT on electricity from 6% to 21%.
In addition to this expenditure on social security will rise more quickly than had been expected. It is now predicted that benefits will get an index-linked 2% in October of next year rather than in 2018 as had initially been predicted.
This means that rather than having to find 2.4 billion euro, the Federal Government now needs to find 4.2 billion euro in order to balance the books.
"A sour taste"
The Federal Government will only confirm the figures and wishes to give no further comment. The Federal Budget Minister Sophie Wilmès (Francophone liberal) told VRT News that the figures are now being analyses by working parties. Ms Wilmès added that the government “will respect the European rules” when arriving at with a final figure that needs to be saved.
Meanwhile, the opposition has launched a vigorous attack on the Finance Minister Johan Van Overtveldt (Flemish nationalist).
The Green Group Leader Kristof Calvo (photo) told the press agency Belga “I’m falling of my chair. The deficit is suddenly twice as big. This leaves a very sour taste when you the efforts people have been asked to make and the government just makes a mess of things. How long can Minister Van Overtveldt continue to muck the budget up?”
The Leader of the Flemish socialists John Crombez (photo) lays the blame firmly at the feet of the Flemish nationalists and Mr Van Overtveldt. Mr Crombez wrote on Twitter that "All summer the nationalist we only interested in themselves and they forgot to keep an eye on the coffers.
In a further reaction Mr Crombez told VRT News that "For the past two years we’ve been paying more and more bills. Where has the money gone? Because the deficit is getting bigger and bigger and the Finance Ministry, Johan Van Overtveldt’s department, accounts for a large part of this Johan Van Overtveldt. This comes as no surprise."