The 2022 budget will be, according to the law's rapporteur, Biancalana, the budget of recovery and economic revival, after almost two years of crisis following the covid-19 pandemic.
Considered the most important bill of the year, his report has a strong political content. Biancalana chose to present the budget through the prism of “existential security”, an issue that is “present in the lives of individuals and even more so in times of crisis”.
The deputy spoke to Delano’s sister publication Paperjam on the subject.
Why did you choose to be the budget rapporteur?
Dan Biancalana. - It's an opportunity to have a general view of public finances. The mission is very interesting, it allows you to broaden your knowledge and your horizon, to have an overall--more macroeconomic--view. So it's a very useful exercise. And I am interested in this complex subject.
But it is also a challenge. I discover it every day with the institutional players, during the meetings of the various parliamentary committees and during my meetings with players which are linked to the personal touch that I want to bring.
I imagine that you get help...
I already have experience with the budget of the city of Dudelange for seven years as its mayor. But, of course, there are preparations to be done. You have to invest a lot of time in reading the opinions in the committee meetings.
It is a work of exchange, not a work in solitude.
But we are accompanied by a parliamentary attaché who is a specialist in public finance and economy. And, depending on the other topics discussed, other parliamentary attachés are added. Generally speaking, it is a work of exchange, not a solitary work.
What characterises this 2022 budget?
It is the budget of economic recovery and revival. We can see this with the economic growth: Luxembourg has managed the crisis well if we compare it with the Eurozone, with a 1.8% drop in GDP in 2020, then with +6% for 2022, and finally, at the multi-annual level, around 3% growth thereafter.
In addition, the government's measures have saved 15,000 jobs, which also has contributed to the economic recovery.
The public debt has nevertheless risen sharply...
The public debt, although it has increased and now stands at around 26.6% of GDP, remains below 30%, which was the objective. Of course, we must remain vigilant. But in the 2022 budget, investments represent between 4% and 5% of GDP, or €3.2bn, and this also contributes to the economic recovery. Now, making public investments increases the debt, but if it remains under control, I don't see it as something negative.
Making public investments increases the debt, but if it remains under control, I don't see it as something negative.
At the multi-annual level, the National Council of Public Finance (CNFP) warns that the increase in costs linked to the ageing of the population risks jeopardising the sustainability of public finances in the long term...
The social security budget is always in surplus. This is indeed decreasing in the framework of the multi-annual financing. But, for the moment, it allows us to pay five years' worth of pensions without having any revenue. So there are issues that will have to be discussed, but not in the framework of the 2022 budget.
That said, the multi-annual budget remains important, precisely because it allows us to ask questions. But, like many other elements, we have to keep an eye on this, without minimising certain comments, without exaggerating them either.
But will the pension system eventually need to be reformed?
For the moment, pension reform is not a subject of debate, it is not in the coalition programme. But it will have to be discussed.
There is no debate on pension reform, it is not in the coalition programme. But it will have to be discussed.
The budget report is a political report. What theme did you decide to focus on?
I decided to focus on the theme of existential security, in the sense of being safe and feeling safe. It is through this prism that I analyse the budget. This issue is present in people's lives and even more so in times of crisis. It is also part of the four principles of the LSAP: freedom, social justice, solidarity and security.
What do you mean by 'security'?
I'm not just talking about public, physical or criminal security, but also about education--training for young people, further education--the chance to find a job, housing, social security, health and justice. There are responses to this aspect in this budget.
Do you have any examples?
For example, there are more than 1,000 people who will have access to universal coverage, which represents a cost of €1.5m. These people, who did not have access to health care before, will be able to have it through social security.
This issue is present in the lives of individuals and even more so in times of crisis.
Another example in relation to digitisation: there are opportunities, but also fears, particularly in relation to job loss. So, efforts are made in the budget for upskilling and reskilling, i.e. everything that concerns upgrading, continuous training in relation to the challenges of digitalisation.
There is also this idea of monetary security, with the cost of living allowance increasing by €200 to compensate for the rise in oil prices.
This story was first published in French on Paperjam. It has been translated and edited for Delano.