Luxembourg parliament approves 2024 budget despite united opposition
The bill will see Luxembourg’s state finances end this year with a €1.9 billion deficit
Luxembourg lawmakers approved the 2024 state budget and its €1.9 billion deficit spending on Thursday despite all 25 MPs from the LSAP, Déi Gréng, Déi Lénk, Pirate Party and ADR voting against the bill.
But with a majority of 35 MPs in the 60-seat Chamber of Deputies, the CSV-DP coalition had no problem passing Finance Minister Gilles Roth’s bill. The budget forecasts state revenues rising by 7.1% to €27.5 billion this year, but the government also plans to increase expenditure by 7.6% to €29.4 billion.
The deficit, equal to 1.2% of GDP, is lower than the €3.6 billion gap discussed during coalition negotiations in October, Roth said.
Ministries to undertake savings
During the budget debate, Roth took umbrage with points raised by opposition MPs. Déi Gréng MP Sam Tanson called the new deficit a “bluff” and asked the finance minister precisely where savings could be made in state expenditures. Savings would come from within a number of ministries, for example by renting office space rather than buying expensive buildings as was the case in the past., Roth said.
Earlier on Thursday, MPs voted unanimously to approve some 48 infrastructure projects, including office space for civil servants in the new ArcelorMittal headquarters on Kirchberg which the previous government approved at a cost of €273.5 million.
Millions for infrastructure as several projects go over budget
In response to criticism that the budget forecast is over-reliant on economic growth, Roth said Luxembourg was in recession in 2023 and that growth of 2% in 2024 was lower than estimates in previous years.
The important thing is that we reduce the deficit, and nevertheless maintain purchasing power of the citizens via tax adjustments
“The important thing is that we reduce the deficit, and nevertheless maintain purchasing power of the citizens via tax adjustments,” he said.
Tax reform for vulnerable
Roth had told parliament on Wednesday that the government planned next year to reform tax bracket 1a, which is for people over age 65 and single parents with a dependent child. This would provide relief for some of the demographic groups most susceptible to poverty, he said.
Debate on the 2024 budget dominated parliament this week, with rapporteur Diane Adehm (CSV) delivering a series of recommendations on how Luxembourg can diversify its economy and attract talent and business.
