The 2020 budget contains a series of budgetary measures intended to establish a framework for fighting against global warming. In light of the fact that transport of all kinds accounts for more than 60% of the country's CO2 emissions, the proposed measures focus mainly on soft mobility and prepare for the introduction of free public transport from 1 March 2020.
The 2020 budget also makes an important contribution to consolidating Luxembourg's position as a centre of excellence in sustainable finance. Budgetary resources will thus be allocated to promote and support initiatives in this area.
Overall, the budget law provides for ambitious investments of up to €500 million in mobility, public transport, transport infrastructure, sustainable energy and the development of sustainable finance. The issuance of a first sustainable loan of up to €1 billion is foreseen in the draft 2020 budget.
The 2020 budget features record investments in infrastructure and quality of life. Investments will increase by 12% compared to 2019 to reach €2.8 billion.
Improving citizens' daily lives
A series of concrete measures should support the development of a more inclusive, healthy and equitable society that fully responds to the challenges posed by digitalisation, the government said. The draft 2020 budget paves the way for the development of the 5G network in Luxembourg in a bid to position the country among the pioneers of 5G.
Key figures of the 2020 budget
The general government balance for 2020 is €757 million, or 1% of GDP. This surplus is expected to increase throughout the period 2020-2023 to reach €1.5 billion in 2023.
In 2020, revenues and expenses will exceed €20 billion for the first time.
Central government expenditure will total to €20.9 billion, an increase of 6.5%. 47% of expenditure is dedicated to social benefits and income transfers, 23% to remuneration and 14% to public investment.
Revenues are forecast to reach €20.3 billion, an increase of 3.7% compared to 2019. They are composed of 48% direct taxes and 37% indirect taxes.
The central government balance in 2020 will be -€640 million, due to various factors such as the accounting for the A400M military aircraft, record capital expenditure of €2.8 billion, a sustained government recruitment policy and a slower pace of revenue.
The government said it expected the balance to improve gradually over the coming years, returning to a level close to balance by 2023.