The social emergencies remain numerous and the government still has time to act!

The last tripartite brought a number of necessary responses to a situation of acute crisis of purchasing power to which it was necessary to react very quickly. Thanks to the determination of the OGBL, it was possible to correct the error of the previous tripartite, which had led to massive and unacceptable manipulation of the index. However, the social emergencies facing the country are still numerous. The government should not forget them.

In this context, the OGBL notes that the Prime Minister’s recent State of the Nation Address and the draft State budget for 2023 presented by the Minister of Finance are far from meeting the challenges. The OGBL Executive gathered on October 24 found it totally incomprehensible that neither the Prime Minister nor the Minister of Finance said a word, during their respective speeches, about the rampant poverty and worsening inequalities in the country, while more and more households are struggling to make ends meet.

Of course, the OGBL welcomes the strong focus on ecology during the State of the Nation Address, but cannot be satisfied with it given all the other social emergencies facing the country. Yes, there is a climate emergency. The OGBL takes it very seriously and, moreover, supports all initiatives aimed at achieving the objectives of the Paris Agreement, but there are also other priorities that the government cannot simply ignore and which it must address. However, in this area, the OGBL notes that the government is not proposing any new important initiatives in these areas, even though there is so much to do.

Starting with labor law. Everyone is aware that the world of work is undergoing profound changes. In this context, labor law must also evolve to adapt to the new realities. An example of this is the workers of digital platforms (crowdworkers, clickworkers, microworkers, appjobbers…) who need a legal framework adapted to these new ways of working. But not only. The OGBL had, for example, welcomed a number of commitments made by the government in 2018 as part of its coalition program, but which unfortunately have still not been implemented. For example, the government has not taken any legislative initiatives during its term in office to improve the reconciliation of private and professional life. Nor has anything been done regarding a necessary reduction in working hours. There is still no plan to reform the law on social plans, nor the completely outdated law on collective bargaining agreements, while 50% of employees in the country still do not have a collective agreement and even the European Union and the OECD are now promoting them.

Another priority for the government should be taxation. The current system remains deeply unfair. Labor income, i.e. wages and salaries, is taxed up to four times more than income from capital: dividends, interest income, profit-sharing, etc. It is therefore urgent to restore more tax justice.

The OGBL demands, first of all, the introduction of a mechanism to automatically adjust the tax scale to inflation. Indeed, without such a mechanism, each time household incomes rise, households are directly subjected to unjustified tax increases and thus to losses of purchasing power. This phenomenon, called “cold progression”, mainly affects the lower and middle income classes.

This is only one of the many demands of the OGBL. There is indeed so much to be done in this area.

And the list of other priority issues that the government should urgently address is long – very long indeed! The OGBL would like to stress in this context that until the next national elections, i.e. by October 2023, the government still has plenty of time to act! (see also our dossier: Four years later – Government’s commitments under the microscope).

The government also has room to take a number of actions. Thus, even if public finances have suffered as a result of Covid-19 and the measures taken to combat soaring energy prices, as outlined by the CSL in its recent opinion on the 2023 draft budget, the state of public finances now looks far better than announced and would make it possible to adopt a counter-cyclical fiscal policy, which is essential to avoid a persistent recession. Fiscal policy should therefore, above all, provide more support to households by increasing social spending and strengthening their purchasing power.

FOUR YEARS LATER Government commitments under the microscope again (PDF)

This article originally appeared in Aktuell magazine (#5 – 2022)