On Tuesday evening, at PWC’s headquarters in the Cloche d’Or, seven politicians took the stage to discuss various issues ahead of the national elections on 8 October: (DP), (LSAP), (déi Gréng), (CSV), (Piraten), (ADR) and (déi Lénk). Each one represents a party currently in the chamber and heads their respective legislative list.
Co-moderated by Paperjam editor-in-chief and political journalist , the debate lasted 90 minutes. “It’s bound to be frustratingly short,” said Labro in his opening comments. “We won’t be covering every topic included in the 2,500 to 3,000 pages’ worth of election programmes.” Rather, the debate focused on three themes: housing, society/taxation and Luxembourg’s attractiveness--as a bonus, working hours was thrown in at the end, too.
Housing
First question: What immediate measures should be taken to ease the housing situation?
“Invest and accelerate,” said the LSAP’s Lenert. “Facilitate access for first-time buyers.”
The DP’s Bettel said: “People who own plots of land, and hang onto them for speculative reasons, should be taxed as long as no building is happening.” He added: “Waive registration fees for first-time buyers, clear them of registration fees.”
Déi Gréng’s Tanson, for her part, advocated for “a paradigm shift that enables investment in affordable housing.”
Said the CSV’s Frieden: “The housing policy of the last ten years has been a real failure… our population is growing and we need to act quickly to prevent social cohesion--via housing--from breaking down.” His proposals on procedure and taxation won the first round of applause of the evening, along with a retort from the sitting prime minister, who said:
“My predecessor, (CSV), said that you screwed up housing.” This won more applause.
The candidates continued to spar over the law on rental leases. “It hasn’t been passed,” said Tanson.
“It should be withdrawn,” replied Frieden.
You’ve all screwed up brilliantly.
“You’ve all screwed up brilliantly,” put in déi Lénk’s Wagner, who suggested taking legal action on rent. “You had ten years and did nothing. We know your record, and I hope you won’t have the opportunity to repeat it.”
“The prime minister says there’s still a lot to be done, and I agree--that’s an admission,” said the ADR’s Keup, adding: “We need to tackle the cause and not the symptoms: this disproportionate population growth. He says he is in favour of lowering VAT on construction, reducing regulations, getting the state to help buy homes, helping construction companies and working on interest rates, all of which is a step in the wrong direction.” For Keup, “we shouldn’t be” working on landlord taxes. “That won’t change much… it’s important to respect the right to private property.”
The Pirate Party’s Clement said: “Not enough has been built, and not fast enough.” He advocated “mobilising the land that the state and local authorities already own” and “increasing density” with the help of the general development plans (PAG). But he also expressed his support for increasing mortgage loan guarantees and facilitating access to rental property, at a time when “taxation favours purchase.”
Luxembourg’s attractiveness
On the topic of attractiveness, the financial centre and talent, Labro asked: Are you (still) interested in being a first mover?
“Absolutely,” said Lenert, citing investment in research.
Bettel, quite mysteriously, added: “I’m not going to tell you what I can’t tell you, but there will be announcements in the next few days or weeks--new companies on the automotive campus.”
Tanson mentioned the production of solar panels in Luxembourg.
Which prompted Clement to cut back: “If solar panels make us a first mover, I have the impression that we are more of a last mover.” He explained: “We need to talk about new technologies that go much further. In committee, we’re often told that we are waiting for our Belgian or French neighbours to transpose the directives. That doesn’t give me the impression of being a first mover.”
We need to set ourselves the target of becoming one of the three most competitive economies in Europe.
“Being a ‘first mover’ has two key elements: attractiveness and competitiveness,” said Frieden, “two points on which we have lost ground in recent years. We need to set ourselves the target of becoming one of the three most competitive economies in Europe, via our tax policies concerning companies and individuals.”
(Bettel: “We’ve had to make some changes to your policy. Previously, we were blacklisted.”)
Wagner preferred the notion of “good mover” to that of “first mover,” arguing: “Cooperation is more beneficial than competition. Competition must involve a loser. In my view, you have to be a first mover when it comes to tax regulation.”
“You can’t be more attractive on the one hand and solve housing problems on the other,” said Keup. “We need to make choices. It’s essential to support the financial centre.”
On that topic--the financial sector--came the question: What should we do in the face of competition from other financial centres?
“Support investment in the sectors of the future, fintech and data management,” said Lenert.
Bettel talked about sustainable finance and keeping the triple A rating. “I want us to be competitive, but also compliant.”
“We need to keep a close eye on what’s happening in Dublin and London,” said Frieden. “What’s clear is that we shouldn’t raise taxes.”
For Wagner and déi Lénk, “We believe that we should be taxing large fortunes and not labour. We want to combat tax evasion, which is damaging Luxembourg.”
According to Keup, “The state needs money, most of which comes from the financial centre. We must remain vigilant.”
And Clement advocated going “back to basics,” which for him means “creating value-added services: green funds, data, etc.”
Co-moderator Labro then pointed out that cross-border commuters represent a pool of talent “at the end of their rope.”
In response, Lenert said: “We have already simplified procedures for third-country workers.” She cited the quality of the work and the living environment as factors in attracting labour, alongside the need to “think of Luxembourg beyond its borders.”
Bettel mentioned the European and international schools.
Tanson, training.
Frieden, the three factors of housing, training and taxation.
“In Luxembourg, thousands of people have come from Latin America and Africa and, even after 20 years in the country working illegally in restaurants or as cleaners, etc., have no papers. They need to gain legal status,” argued Wagner.
Keup reiterated that we must “not become victims of our attractiveness,” adding: “The quality of life has declined in recent years in terms of mobility, crime, cost of living…”
Which irritated Bettel, who expressed pride in “welcoming refugees, people who flee their country to survive.” Applause.
“Fine words,” said Wagner, challenging the PM.
“I’m talking about political refugees, not economic ones,” explained Bettel.
“You’re comparing two kinds of misery,” concluded the dei Lénk candidate.
For the Pirate Party, recognition of diplomas and the promotion of employee share ownership are priorities, as is abolishing taxation based on marital status, a measure that also elicited applause from the audience.
“We agree on this point,” responded Bettel.
“You could have done it,” replied Clement.
“I would have liked to,” said the PM, talking then about the successive crises during his term.
Society, social justice, taxation and environmental challenges
Tax reform: when and how?
“I’m not promising that it will happen on 1 January,” said Bettel. “We need to adapt the tax scale.”
Such a tax scale is a “major priority, which we should have [already] put in place,” said Lenert.
“To make our system fairer and adapt it to modern times,” agreed Tanson, who added: "We can’t just cut taxes, we have to keep investing in the future. We also need a tax on large fortunes by clearing personal property ownership.”
“If this coalition continues, there will be no tax reform,” said Frieden. “We believe that we need to start later, widen the brackets to reduce the rate of increase, avoid imposing higher taxes and bring the scale into line with inflation, which will cost €500m.” This comment was followed by a battle between the parties over the cost of the measures.
Keup does not believe in this tax reform. “We have to change some small aspects, but we have to remain realistic. We have debts and a 30% threshold that we must not exceed. What’s important is to give advantages to families with children. Like Luc Frieden, we are opposed to new taxes on wealth or inheritance.”
It's not a question of working hours.
Bonus topic: reduced working hours
To close the debate, the candidates were permitted a closing statement on the subject of reducing working hours.
Lenert reaffirmed her desire to shift to a 38-hour working week, using a sector-based approach via pilot projects to “create the evidence.”
“Technical progress cannot be dissociated from social progress” was Bettel’s take. He advocated adding flexibility instead of outright reduction, which he described as “hara-kiri.” He quipped: “We’ve seen how the 35-hour week has boosted the economy in France.”
That economic situation, said Tanson, “can be explained by factors other than the 35-hour week.” She added: “There is huge demand for people to work less so that they can concentrate on other things. And we need to support young parents, so that they can work less but nevertheless remain working in the period before their children start school.” This comment also won applause.
For Frieden and the CSV, “We are in favour of freedom of enterprise, which should be decided sector by sector and not imposed by law.” People also clapped for that.
Wagner recalled previous reductions in working hours, pointing out that “Bosses are always sweating, and then we get through it.” His party advocates a 32-hour week.
Meanwhile, this whole thing is a “non-issue” for Keup. “I think 40 hours is fine. What we should be looking at is giving parents with young children the chance to have one of them look after their children on state wages, instead of paying for a crèche.”
At this, the prime minister dropped his head in his hands, apparently regretting that he was no longer allowed any rebuttal.
Clement got the final word: “It’s not a question of working hours. These days, we spend more time in transit. Waiters can’t become more productive by working less, and there will always be sectors that lose out when working hours are reduced. That’s why we need to do it sector by sector, with collective agreements.”
This article in Paperjam. It has been translated and edited for Delano.