Net Financing Needs

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In the contribution of Flanders to the Belgian Stability Program, the Flemish Government has committed to the return to a balanced budget in 2017 and to maintain a balanced budget for the coming years. In the table below, there is an overview on the net financing needs of the Flemish Community, in the period 2017-2020.

The initial 2017 budget reached the anticipated budgetary balance for the first time, not taking into account the investment costs for the Oosterweel infrastructure nor the investments in hospital infrastructure that was built before the transfer of this authority in 2016.  In realisations Flanders outperformed this target, and had a surplus of 507 million euro.

With the amended 2018 budget outline, the budgetary balance objective of the Flemish Community  has been confirmed. In realisations Flanders outperformed this target again and had a surplus of 367 million euro.

Apart from the Oosterweel infrastructure and the investments in hospital infrastructure, a correction has been made also for a settlement between the federal government and the Flemish Community that rectifies the surplus that was transferred by the federal government over the last three years relating to the Sixth State Reform. A fourth correction concerns the takeover of debt of Flemish municipalities by the Flemish Community of municipalities that voluntarily merge together. Since this improves the net financing needs of the Flemish communities, it is neutral for Flanders as a whole.

As in 2017 and 2018, the budget will be structurally balanced in 2019 with even a surplus of 154 million euro. 2020, on the other hand, will be a more difficult year for the budget, as we are experiencing the effects of the economic downturn. A number of measures will also reach cruising speed in 2020, such as the impact of the federal tax shift, a quarter of which will be financed by the regions, and of the collective bargaining agreements concluded with the social partners in welfare, education and the Government of Flanders. Finally, we are implementing a Flemish tax shift with regard to housing taxation. The reduction in registration duties will immediately be reflected in our budget, while the phasing out of the housing bonus will lead to a gradual increase in budget margins. We will therefore have an estimated deficit of 431 million euros in our budget in 2020.

 


Net Financing Needs 2017-2020 (in million euro)

 

2017

2018

BR 2019

IB 2020

Financing needs (1)

581

-744 81 -623

Oosterweel (2)

34

11

73

192

Hospital infrastructure before 2016 (3)

40

0

 

 

Takeover debt communities (4)

 

95

 

 

One-off settlement relating to State Reform (5)

 

1.005

 

0

Financing needs after corrections regarding budgetary balance objective (6=1+2+3+4+5)

507

367

154

-431