“Enter a kilometer charge, for example around Brussels and Antwerp, with a clear distinction between rush hours and the rest of the day. Consider abolishing the tax benefit for payroll cars, or book it only for emission-free cars. ”
These are two of the recommendations that the OECD makes today in its economic review of Belgium. A kilometer charge can alleviate mobility problems and is beneficial for the climate and air quality. Moreover, it is a measure that can have a positive influence on productivity growth: drivers who are stuck in traffic, lose time and money. The OECD regards the fact that productivity increases more slowly in Belgium than in other Western countries as a core problem of the Belgian economy. For that reason, it is also recommended to relax the strict regulations in some sectors. In addition to productivity, the OECD also says that a lot of improvements are possible in the labor market and financial policy.
High debt ratio
The high debt ratio makes our country extra vulnerable, mainly because the costs of aging will still require masses of tax money. Without additional savings, the government debt may rise to 200 percent of GDP in 2060 due to the rising cost of aging, the report warns. “The resilience of public finances needs to be improved.”
Many of the pain points are known. The high labor costs, for example. These can be reduced if other taxes, such as VAT, go up. In our country, a great many products and services enjoy a reduced VAT rate, according to the research institution. The low employment rate is also a classic. A better activation policy can be helpful here. Lifelong learning efforts could also be improved. The OECD suggests the possibility of introducing individual training allowances.
Illogical pension system
A higher tax on fossil fuels can also serve to reduce the burden on labor. The OECD, for example, favors a CO2-tax for sectors that fall outside the emissions trading system. The OECD also recommends tackling the many inefficiencies in our country. An example is the fragmented and illogical pension system. In that regard, the report argues for more integration, for example via a point-based pension. Resources can also be spent much more efficiently in health care and education than is currently the case. It is recommended to regularly review government spending at all levels.
The OECD not only has criticism, but also pats the back. For example, for the redistributive effect of the Belgian welfare state, which is the cause of high scores on well-being.