Purchasing power, purchasing power, purchasing power! All parties promise in their election manifesto to ‘restore’, ‘protect’ or ‘strengthen’ your purchasing power. Easy to say, but how? That is not an innocent question, because the way in which a party wants to increase purchasing power determines who wins a little, wins a lot and who loses.
How does that work for you? Enter your income and family situation below and calculate the impact of the election promises on your income. Your data will not be stored.
You be warned
Before we dive deeper into the numbers, first a warning. The fact that the Planning Bureau is checking and popping election balloons is a big step forward. It forces parties to provide clarity about their proposals, and it provides an estimate of the budgetary impact and the winners and losers. At the same time, the exercise is limited: the purchasing power effects of only 43 of the 209 proposals submitted by the Flemish parties were calculated in detail. The impact on property income remains largely out of sight. The PVDA did not submit any measure for which the Planning Bureau could calculate the impact on income.
But the elephant in the room is of course the wide gaping budget deficit. If a party offers tax incentives on top of that, someone will ultimately have to pay the invoice – and that will also cost purchasing power. Yet the calculation remains interesting, because it reveals who the parties have a soft spot for and who they are less concerned with. In that sense, it is not so much the precise amounts that are of interest, but the ideological color that parties give with their proposals.
READ ALSO. The promises and balloons calculated: how much do the election manifestos of the Flemish parties cost?
1. The Green Factory: from rich to poor
The most remarkable income measure came from Groen. The graph with the decile distribution, which indicates what each successive ten percent of families – ranked from poor to rich – gains or loses, looks like a Green Factory with one long, smoking chimney. Under Groen’s proposals, the poorest ten percent of families would receive an extra 777 euros per month, an increase of 48 percent on average. After all, Groen wants to eliminate poverty from the country and, according to the Planning Bureau, has also succeeded in reducing the risk of poverty from 11 to 0 percent. But that prosperity guarantee, and the associated tax cuts, cost more than 16 billion euros.
Perhaps equally remarkable is that the highest incomes are also improving on average. This is because the Planning Bureau’s exercise is incomplete: the at least 15 billion euros that the party collects from the wealthy and owners of payroll cars is not included in these figures. In reality, the Groen Fabriekje not only has a long chimney on the left, but also a geothermal bore on the right. Under Groen’s proposals, the richest would lose significant purchasing power. Groen opts for a decidedly left-wing proposal, with a significant transfer from rich to poor.
2. Open VLD and N-VA dare to disillusion voters
Showing voters that they will lose income as a result of their measures: it is not an electorally attractive plan. In the first calculation dating from 2014, then by KU Leuven and others The standard, no party dared to launch a proposal that would cause an entire decile (10 percent of families) to decline on average. In 2019, Groen did this with the very richest, and the N-VA with the very poorest. Now Open VLD dares to challenge a calculation by the Planning Bureau that shows that the poorest 40 percent of families are experiencing a decline on average. The poorest also lose in the N-VA and the CD&V.
This is because those parties want to cut back on replacement incomes. Open VLD, the N-VA, CD&V and Vlaams Belang propose limiting unemployment benefits. In the N-VA proposal, this costs an average of almost 900 euros per month for a family with an unemployed person. The N-VA and Open VLD no longer want benefits to increase on top of indexation – they only make a (partial) exception for pensions.
Open VLD and the N-VA also did not feel the need to promise mountains of gold: an average family will only gain 20 to 30 euros per month with their calculated proposals. That is ten times less than the most generous parties. Here too, the calculation is incomplete: if a much broader package of measures is calculated, the N-VA proposals will result in a decline in purchasing power at the end of the government period. The party is the only Flemish party that promises a major budgetary effort.
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3. Vlaams Belang and Vooruit want to please everyone
In the Planning Bureau’s calculations, Vlaams Belang presents itself as a lavish treat to everyone’s friend. With its proposals, the party will cause the budget deficit to rise to a staggering 53 billion euros by the end of the government period. This makes it possible to hand out the largest tax gifts with a tax cut of 14.7 billion. Although Groen increases purchasing power almost as much in the Planning Bureau’s calculations, the beneficiaries are very different: with Groen, almost half of the effort goes to the poorest 30 percent, with Vlaams Belang this is the richest 30 percent.
Vooruit also did its best to promise everyone, and especially working people, something extra. Apparently the Socialists also did not want to disappoint anyone: only one in 200 families would suffer from their measures, the lowest figure of all parties. That is also not in line with reality: the Planning Bureau did not include the almost 15 billion that Vooruit wants to raise from the wealthy in this purchasing power calculation.
4. CD&V keeps a low profile in the middle
We almost forgot: the Christian Democrats. In this purchasing power exercise, the CD&V has succeeded in attracting as little attention as possible. No matter how the impact of the measures on income is calculated: the party is always somewhere in the middle, usually between left and right. This also applies to the impact on poor families, rich families, large families and childless families. The success in combating poverty? Somewhere in between. Evolution of inequality? Idem. And which incomes will improve relatively most with CD&V? Yes, the one in the middle.
You have been warned (bis)
The Planning Bureau’s purchasing power calculation shows which parties want to support which citizens with an injection of purchasing power, and partly also who pays the bill. That makes the exercise interesting. But the chance that any of the above programs will be implemented in full is nil. Not only because there is no budgetary space, but also because no party can decide on its own.
After all, in a coalition government there is always give and take. In addition, there are also at least six possible coalition partners on the French-speaking side, each with their own proposals. And even if the coalition partners in the government largely agree on a tax reform, that is no guarantee that it will happen. After all, the blueprint of Minister of Finance Vincent Van Peteghem (CD&V) also came to nothing.
READ ALSO. CD&V and Open VLD take ‘NV Antwerpen’ in their sights: “The next Flemish government must distribute money more fairly across municipalities”
