The restricted Council of Ministers (kern) reached an agreement on Friday shortly before 5 p.m. on a “discounted energy package“. Prime Minister Alexander De Croo himself announced on Twitter the conclusion of this agreement, before detailing everything during a press conference at 5.30 p.m.
“Energy bills are particularly high at the moment, not only in Belgium, but in all European countries“, began the Prime Minister in front of the cameras, “This is why we said that we would do everything possible to support citizens and businesses as best as possible. […] and we have decided, in the federal government, to take a package of necessary measures to bring solutions to these very difficult months that our families and businesses are going through“. In addition to having extended until March 31, 2023 the measures “very important” already in place (6% VAT on electricity and gas, the extended social tariff), the federal government has therefore taken another package of “basic measurements“, detailed by Alexander de Croo and the ministers present at the kern.
Here is the approved package of measures:
For households
For households, support of 135 euros for gas and 61 euros for electricity will be in place for the months of November and December 2022. The measure will be targeted according to income and contracts, added the Prime Minister, who insisted on helping the “extended middle class”.
Concretely, all individuals who do not have a fixed contract concluded or renewed from October 1, 2021, i.e. 50% of contracts, will receive aid. For people whose annual income exceeds a certain threshold (62,000 euros net for a single person, 125,000 euros for a couple), the tax authorities will consider the intervention as a taxable benefit. According to the government, this only concerns the highest 15% income bracket. For each additional dependent, 3,700 euros are added to the annual net taxable income.
In addition, the federal government has decided toincrease fuel oil check, taking it from 225 to 300 euros. It will be possible to request it until March 31, 2023.
For companies and freelancers
Measures are also planned for companies and the self-employed: possibility of deferral of payment of social contributions and taxsetting up of’temporary unemployment ‘energy’d’a moratorium on bankruptcy and put gas/electricity excise duties at the European minimum for the months of November and December.
For temporary unemployment, the worker will receive 70% of his remuneration plus 6.10 euros per day, like what was practiced during the Covid crisis.
“The reduction in excise duties on the first slices of consumption, this represents 325 euros for a baker or 1,000 euros for a neighborhood supermarket”, illustrated the Minister of the Economy Pierre-Yves Dermagne.
The federal government also puts back in the saddle the measure of the bridge right, set up during the health crisis. Of the longer repayment plans will also be provided for the social security contributions of the self-employed. Awareness of advance payments of social security contributions for the self-employed will be put in place.
“Of the 25 measures that I had put on the table after meeting the stakeholders, more than half have been decided and will be implemented”, underlined the Minister for the Independents David Clarinval, again citing the implementation of plans repayment of tax debts or tax exemption for regional aid measures.
For the self-employed, it will be possible, amicably, to spread the payment of social contributions without penalties over a long period, if difficulties have been observed during the last half of 2022, the first quarter of 2023 or during the annual holidays, underlined the Minister of Social Affairs Frank Vandenbroucke.
Finally, the agri-food sector will benefit from priority energy supply in the event of a risk of disruption.
Measures for one billion euros
These measures should mobilize an amount of 1 billion euros. This funding comes from additional VAT revenues collected by the State and from the higher nuclear income this year. For next year, the federal government is still counting on a European decision to limit prices. But new measures are not excluded, in particular via the income which could arrive via the “skimming” of the superprofits reaped by the energy sector.
“We are not going to leave anyone on the quay,” said Mobility Minister Georges Gilkinet. “The path does not end here. The measures taken today will be valid until December, but we will be able to adjust the next aid packages. Alongside the most vulnerable, it was important to direct this aid towards all those and all those who need it. But also to encourage companies in their energy-saving investments and to grant them payment facilities.”
The main ministers of the federal government had been meeting since 09:00 on Friday. An agreement was already announced in the morning to several sources, but the negotiations lasted a little about the modalities.
FEB satisfied
The Federation of Belgian Enterprises (FEB) is satisfied with these measures adopted. In particular, it welcomes the extension of the temporary unemployment scheme, the deferral of payment of social contributions, the temporary suspension of declarations of bankruptcy and the reduction in excise duties on gas and electricity towards the European minimum. These measures are positive in the short term to help companies currently in difficulty, underlines the FEB. But the federation adds that not addressing “the crucial question” structural problems of the country becomes “increasingly problematic“.
“Our wage cost handicap is once again approaching 16%, our trade balance is plunging into the red and companies are increasingly postponing their investments.“, explains Pieter Timmermans, CEO of the FEB. “If no solution is found to these problems, the risk of job loss and therefore of income is particularly high. We must therefore urgently get down to a global agreement safeguarding the competitiveness of our companies. Otherwise, we expose ourselves to production stoppages, relocations and ultimately job cuts.“
The UCM also judges that the government has taken the measure of the “economic disaster” that companies experience on a daily basis. These decisions are a first step in the right direction, but “it is totally insufficient“, adds the organization. It calls in particular for a moratorium for energy bills, reasonable prices which allow the continuation of activities”in a calmer spirit” and an assured supply. She also wants support measures from the regions.
Test Achats asks for structural measures
Test Achats welcomes the measures announced by the government. However, the consumer defense organization calls for the implementation of structural measures. Test Achats sees the various financial supports which will be deployed in particular in November and December in a positive light, but recalls that it has been pleading for a year for structural measures. “More and more consumers are faced with deposit invoices well above the tolerance threshold“, comments the organization.
This pleads for the extension of the social tariff at the same time as the sustainability of the system in the long term, financed by possible new income from excess profits. It also asks to reduce the indexing parameters. The authorities must force suppliers to index their prices monthly, and to clearly explain to consumers which parameter is used for their contract. The energy bill must also be more readable and Test Achats hopes for a “clearing of certain taxes, fees and other contributions.”