Following an invitation by the LSAP, an LCGB delegation evaluated the tripartite agreement reached on 28 September which aims to reduce the impact of the energy crisis on households. The left-wing party and the trade union qualified the accord as a “rapid response to the many challenges posed by soaring energy prices and the consequent rise in inflation.”

Tax scale adaptation

An adaptation of the tax scale--which places people in a bracket depending on how much they earn--was not introduced by the tripartite agreement although its application according to inflation is part of the LSAP’s fiscal policy. Finding common agreement on that within the DP-LSAP-Déi Gréng coalition, however, is another matter.

“It is high time to undertake this tax reform, a tax reform that we place under the theme of tax justice in favour of greater equity. We propose a substantial reduction in payroll taxes and the introduction of a single tax scale,” explained  leader of the LSAP parliamentary group.

The LCGB and the LSAP consider that although the tax reform from 2017 introduced a reduction in taxes for households, inequalities still persist in that domain.

Balancing frugality and government spending

Ahead of the tripartite talks in September finance minister (DP) “It is part of my job description, I have to maintain a prudent fiscal policy,” she said. Maintaining the triple A rating granted to Luxembourg by credit rating agencies was a priority during the talks. This rating depends in part on the health of the country’s public finances.

In view of the delicate balance between providing the necessary public support and maintaining the business climate, the role of finance minister takes on a special significance, according to Backes. As she explained after the Ecofin meeting of EU finance ministers on 8 and 9 September, “I have learned from my counterparts that they think it is really one of the loneliest jobs in the world to be a finance minister at the moment.”