The 2024 Luxembourg budget, presented by Finance Minister Gilles Roth, focuses on improving household purchasing power, investing in infrastructure, digital innovation, and climate change measures.

The government plans to address housing market challenges by increasing financial support and investments in construction projects, while also expecting improved revenues by 2025, despite projections of rising public debt.

Opposition parties criticised the budget for lacking concrete measures to fight poverty and address social issues, questioning the efficiency of relying on the private sector for housing solutions and expressing concerns over austerity measures and potential future policy shifts.

Key takeaways – The 2024 budget proposal by Luxembourg's Finance Minister introduces several key measures aimed at strengthening the nation's economy and addressing societal needs amid challenging global circumstances. It emphasises boosting the purchasing power of households through adjustments in the tax table aligned with wage indexations, and supporting specific groups like single parents and widows.

The budget also plans significant investments in infrastructure, digital innovation, and efforts to combat climate change, such as the allocation of €4.3 billion for rail and road projects.

Additionally, there are plans to make Luxembourg more attractive to investors by reducing corporation tax by 1%.

Temporary concessions – In response to the pressing issue of housing, the government has included substantial measures in the new budget to encourage construction and investment in the housing sector, acknowledging the shift from a supply shortage to a decline in housing demand.

Despite these efforts, the state revenue is expected to decline due to the housing measures, but the government remains committed to addressing what is considered the country's most significant challenge.

Additionally, the budget projects a decrease in the budget deficit and a stabilisation of public debt relative to GDP, aiming for a healthier fiscal position by 2025.

Opposition reacts – Opposition parties have raised concerns regarding the 2024 budget. They argue that it lacks adequate measures to address the diverse socio-economic challenges within the country, particularly criticising the absence of targeted initiatives to combat child poverty and improve overall social welfare.

The criticism extends to the government's approach to the housing crisis, accusing it of over-relying on the private sector and providing minimal direct support to those in need.